Re Petruk, A.R.A. v Ex parte The Official Trustee in Bankruptcy

[1985] FCA 671

Re: ELISEO EVASIO CENSORI and LAIMA CENSORI
And: OFFICIAL TRUSTEE IN BANKRUPTCY
No. W46X of 1983
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Sheppard J.

CATCHWORDS

Bankruptcy - only one creditor present by proxy at meeting of creditors called pursuant to authority under Part X of the Bankruptcy Act 1966 - final dividend paid - application to set aside deed dismissed.

Bankruptcy Act 1966, ss. 188, 200, 202, 222.

HEARING

SYDNEY
#DATE 20:12:1985

ORDER

1. It be declared that the application made on 31 October 1985 by the Official Trustee in Bankruptcy was made after the payment of the final dividend paid pursuant to the deed of assignment referred to in para. 1 of the application.

2. The application be otherwise dismissed.

3. There be liberty to apply.

NOTE: Settlement and entry of orders is dealt with in Rule 124

of the Bankruptcy Rules.

JUDGE1

This is yet a further application to set aside a deed of assignment of which Mr. John Ramsay Paul Partridge was trustee. The deed was dated 5 April 1983 and made between the debtors, Eliseo Evasio Censori and Laima Censori, and Mr. Partridge. The deed was in respect of their joint estate and also in respect of each of their separate estates.

1. It appears from the minutes of the meeting of creditors which passed the requisite resolution under Part X of the Bankruptcy Act 1966 that the persons present at the meeting were Mr. P.J. Collins, who held a proxy on behalf of a company, Charmans (N.S.W.) Pty Limited, Mr. Partridge, who is described as a controlling trustee, Mr. Harper, described as commercial manager to Mr. Partridge, Miss Rosemary Young, said to be a secretary, and one of the debtors, Mr. Eliseo Censori.

2. In addition to there being in evidence the proxy given to Mr. Collins by Charmans (N.S.W.) Pty Limited, there is a proxy purporting to be given by Mr. Ron Miller of Pegulan Floor Coverings Company of 26 Viking Court, Cheltenham, in Victoria. The proxy is not signed and at the top of it there is the statement, "Appointment of Proxy by Telephone." There is no reference to any attendance by Mr. Miller at the meeting in the minutes. The proxy was in favour of the chairman.

3. Section 200 of the Act provides in sub-sec. (2) that a proxy may be appointed to vote on all matters arising at a meeting or on particular matters specified in the instrument of appointment. Sub-section (1) says that a creditor may vote either in person or by his attorney or by a proxy appointed in writing by the creditor or his attorney. In those circumstances it seems clear that the Act does not contemplate proxies appointed by telephone and the proxy purporting to be given by Mr. Miller is therefore of no effect.

4. In consequence, there was only one creditor present at the meeting, namely, Mr. Collins, who was validly appointed proxy for Charmans (N.S.W.) Pty Limited. Section 202 of the Act provides in sub-sec. (1) that, at a meeting under the Division (Division 2 of Part X), two creditors, being creditors entitled to vote at the meeting present personally by attorney or by proxy, constitute a quorum. Since only one was present, the meeting was not validly held and the resolution which was purported to be passed at the meeting that the debtors execute a deed of assignment under Part X of the Act was not a resolution under that Part. Accordingly, the deed entered into pursuant to it on 5 April 1983, was not a deed of assignment under Part X.

5. If there were no other matter, it would follow that I should make an order under s. 222 declaring the deed to be void. However, evidence has been presented which suggests that the distribution of dividends from the estates is for practical purposes complete. In evidence is a "Statement of Realisation and Distribution of Estate" signed by Mr. Partridge on 18 January 1984 which shows that amounts received, details of which are given in another document, totalled $19,266.57. Payments totalled $18,769.40. These included Registrar's fees, the trustee's remuneration, an amount for postage, stationery and printing fees, and $9,000 which was paid to the creditors and represented a dividend of 18 cents in the dollar on the sum of $48,313.76 owed to the creditors.

6. The difference between the amounts received and the amounts paid is $497.17. There is no explanation in the evidence as to how this sum was disbursed, if it was disbursed, or how otherwise it has been accounted for. In the light of the fact that the amounts owed to the creditors exceed the sum of $48,000, it would seem to me that for practical purposes the sum of $9,000, which represented the dividend of 18 cents in the dollar, is all that the creditors will receive. There is no suggestion that there are any other assets which may be realised or any other source from which the trustee may recover money.

7. Sub-section 222(6) of the Act provides that the Court shall not make an order under the section unless the application for the order is made in relation to a deed of assignment before the final dividend has been paid under the deed. This application was made on 31 October 1985 after the payment of the dividend of 18 cents in the dollar. The question is whether I should regard that as being the final dividend for the purposes of sub-sec. 222(6) or whether, there being a balance unaccounted for of almost $500, I should take the view that that is not the case.

8. In my opinion, one has to be practical about the matter. There is no basis upon which the creditors will in fact receive any further dividend. As I have said, for practical purposes the dividend already paid is the final dividend. In those circumstances, I have reached the conclusion that, although the deed of assignment was not a deed of assignment under Part X and might otherwise have been avoided under sub-sec. 222(2), I should not make the order because the application to avoid the assignment was not made until after the final dividend was paid.

9. Discussion ensued as to the form of relief which ought to be granted. His Honour then continued:-
   
   HIS HONOUR: I declare that the application made on 31 October 1985 was made after the payment of the final dividend paid pursuant to the deed of assignment referred to in paragraph 1 of the application. The application is otherwise dismissed. There will be liberty to apply.