Re Lawrence, G.C. & Anor v Ex parte Burns, R.J. F.
[1985] FCA 469
•19 SEPTEMBER 1985
Re: GEOFFREY CHARLES LAWRENCE and DESMA FLORENCE LAWRENCE
Ex Parte: ROBERT JOHN FRED BURNS and PETER IVAN FELIX GEROFF
No. PART X 11 of 1984
Bankruptcy
COURT
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.
CATCHWORDS
Bankruptcy - deed of assignment - Part X - witness an assignee - whether effective to assign - whether must be treated as valid until declared void - extension of time for attestation of deed - discretion.
Estoppel - judgment in rem - what is - binding quality - whether reasons for decision binding.
Practice and Procedure - attack on judgment not giving rise to estoppel - whether abuse of process.
Bankruptcy Act, ss.30(1)(c), 216, 222
HEARING
BRISBANE
#DATE 19:9:1985
ORDER
The time for attestation of the deed of assignment executed by the applicants and by the debtors on 8 October 1984 be extended to 10 October 1985.
JUDGE1
This application is by two trustees registered under the Bankruptcy Act, seeking relief against the consequences of a judgment of Beaumont J.
On 8 October 1984 the debtors, G.C. and D.F. Lawrence, signed a deed of assignment under Part X. The applicants were the assignees and they acted under the deed. One thing they did was to bring proceedings against a company named Lorac Mining Pty Limited about title to an aircraft. That application came on before Beaumont J. but his Honour dismissed it on the ground that the deed was ineffective. That was so, his Honour said, because the signatures of the debtors were witnessed by one of the assignees, the first applicant.
Before me the applicants apply for a declaration that the deed is not void or for an order extending time to allow the deed now to be witnessed. It is said that a lady who observed the execution of the deed may now be able to attest it properly.
The declaration sought is based on the view that Beaumont J. was wrong. The questions involved may therefore be set out as follows:-
1. Am I entitled, or obliged, to reconsider the decision of Beaumont J.?
2. Should I differ from his Honour's
conclusion?
3. Should time be extended?
First Question: The decision of Beaumont J. is, prima facie, binding only as between the applicants and Lorac Mining Pty Limited, and persons claiming through them. Mr D.J.S. Jackson, who appears for the applicants, says it is not binding otherwise, and that he is entitled to challenge it.
A judgment in rem is one determining the status of a person or thing, or the disposition of a thing, as distinct from the particular interest in it of a party to the litigation: Halsbury 4th ed. vo1. 16 par. 1522. It is characteristic of a judgment in rem that it binds all the world: ibid par. 1537.
However, the judgment of Beaumont J. is not conclusive as against all the world, as to the status of the applicants. His Honour simply dismissed their application and made consequential orders. A judgment in rem is conclusive only as to the point adjudicated upon, which is the status of the res: Coles-Smith v. Smith (1965) Qd R 494 at p 506 per Stable and Gibbs JJ. It is not easy to find examples of judgments held to be binding in rem as to anything other than the immediate effect of the judgment itself, as opposed to the reasons or findings; some are mentioned in the footnotes to Halsbury 4th ed. vo1. 16 par. 1538. Coles-Smith v. Smith (above) is more typical; it was there held that a divorce decree is not conclusive as to the validity of the ground on which the decree was granted.
Here, the judgment did not itself say anything about the status of the assignees and is therefore not binding in rem. In contrast, it appears that a declaration that a deed is void under s.222 of the Act would be so binding.
Two further points fall to be considered under this heading. The first is whether the doctrine of abuse of process, which has recently shown expansive tendencies, applies: see Hunter v. Chief Constable of the West Midlands Police (1982) AC 529. It was there held that a decision on a voir dire in a criminal case as to the voluntariness of confessions, coupled with the jury's guilty verdict, prevented the accused from suing civilly in respect of the matters agitated on the voir dire, namely that they had been beaten by the police. Being apparently of the view that there was no estoppel, properly so-called, the House of Lords held that the institution of the civil proceedings was an abuse of process. It is not very clear for what proposition the case stands as authority, but even if it is authority for the rule stated in the headnote (at p.530D) and if the rule there stated represents the law in this country, still I should not extend it further so as to characterise the attack on the judgment of Beaumont J. as an abuse of process.
Since that attack is not effectively met either by the law of estoppel, or by the suggestion that it is an abuse of process, the next point is whether I am obliged to entertain it. In my view, the answer is yes. In doing so, however, I am not merely to have regard to the principle of judicial comity, amongst members of the same Court; I am asked to take a different view from his Honour, not merely on an abstract point of law, but on the validity of the very same document he had before him. It is my opinion that in such circumstances a judge should be especially reluctant to disagree with the former decision.
Second Question: I pass now to consider whether I agree with the view of Beaumont J. It applies, to the deed provided for by the statute, the rule that a party to a deed is incompetent as an attesting witness. This is adequately supported by Seal v. Claridge (1881) 7 QBD 516 at p 519. Further, the wording of the relevant section points towards his Honour's conclusion. Section 216(1) says in effect that the deed is to be executed by the debtor and trustee and s.216(2) says: "The execution of the deed by the debtor and by the trustee shall be attested by a witness." The natural reading is that the witness is a third person, not one of the first two named. I therefore agree, with respect, with his Honour's construction of the section.
The other suggestion made was that his Honour's view as to the application of s.222 is inconsistent with my decision in Re Peter Dawson; ex parte Arthur Andersen and Co. (unreported; 29 March 1985). I there held that "unless and until a declaration is made under s.222 that a Part X deed is void, it must be treated as valid for the purposes of s.228(2)".
Section 222 empowers the Court, in certain circumstances, to make a declaration that a deed is void. Section 228(2) is the provision restraining the presentation of creditors' petitions and the like where a deed of assignment has become binding. The Dawson case, however, concerned a deed which was not void on the face of it; here, an examination of the document shows that it was not attested as the statute requires. Although I confess to slightly more doubt about this aspect than the other point, namely the construction of s.216, I do not think I should differ from the view of Beaumont J.; his Honour's opinion was the rule that such a deed is valid until declared void under s.222 has no application where there is not such attestation as is required by s.216(2).
It follows that I accept, with respect, the correctness of the decision of Beaumont J. and will not make the declaration sought.
Third Question: Whether time should be extended. It is convenient here to set s.216 out in full:-
"(1) A deed of assignment or a deed of
arrangement shall be executed by the debtor and the trustee within 21 days from the day on which the special resolution requiring
the debtor to execute the deed was passed.
(2) The execution of the deed by the debtor and by the trustee shall be attested by a
witness."
It appears likely that the intention was that the whole process of execution, including attestation, should take place within 21 days from the resolution. Since attestation is essential to the validity of the deed, there would not be much point in fixing a time limit for the signing by the debtor and trustee, while leaving the time for attestation without limit. The necessary implication in s.216(2) is that the attestation must take place forthwith on execution by the debtor and trustee. On that view, it is clear from the Full Court's decision in Re Gagliardi; ex parte Mount 57 ALR 718 that there is jurisdiction to extend time under s.33(1)(c).
During the period 8 October 1984 to the date Beaumont J. delivered his judgment, 6 March 1985, the applicants presumably were unaware that the deed was ineffective. I think they can hardly be blamed for that. However, they delayed for some months before filing the present application and no adequate excuse has been put forward for the apparent lack of any sense of urgency. Further, it is possible that people affected by the decision of Beaumont J. have relied upon it.
On the other hand, neither the debtors nor the creditors, who have been advised of the application, have appeared to oppose it. I have noted that in an unreported decision of Re Faulkner; ex parte The Official Receiver (February 1981) Lockhart J. gave an extension of time to elect to proceed with an action years after the time limited by s.60(3) had expired; further, that was the second extension which had been given. The case is useful as an illustration of the wide limits of the discretion to extend time and I am of the view that I should exercise that discretion in favour of the applicants here.
It will therefore be ordered that the time for attestation of the deed of assignment executed by the applicants and by the debtors on 8 October 1984 be extended to 10 October 1985.
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