Smeaton, K.R. v Kingham Agencies Pty Ltd

[1987] FCA 456

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION ) QLD Part X 87 of 1987

BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE OF OUEENSLAND	)

RE: KEVIN ROY SMEATON

Debtor

EX PARTE:	KINGHAM AGENCIES PTY. LTD. and ROBERT
JOHN BAILEY and EDWARD CHARLES ROACH,
MAUREEN JOAN RAOCH and AMANDA JANE BEAL

Appllcants

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J .
DATE C)F OPDER:	17 AUGUST 1987
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

The applicatlon for an extension of tlme In whlch to

execute a deed of arrangement be dlsmlssed.

NOTE: Settlement and entry of orders is dealt with In

Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COTJRT OF AUSTRALIA	)
GENERAL DIVISION	) QLD Part X 87 of 19R7
BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND )

RE: KEVIN ROY SMEATON

Debtor

M PARTE:

KINGHAM AGENCIES PTY. LTD. and ROBERT

JOHN BAILEY and EDWARD CHARLES ROACH,

MAUREEN JOAN ROACH and AMANDA JANE BEAL

Appllcants

PINCUS J . 17 AUGUST 1987

In thls matter an appllcatlon ha5 been made by M r .

Dutney Instanter f o r an extenslon of tlme to exec-Ate a deed. The

debtor was the sub~ect of a meetlng of credltors on 29 May i 9R7 at

the offlce of a flrm of accountants at whlch there was passed a

resolutlon In these terms: "That pursuant to sectlon 204(l)(b) of

the Bankruptcy Act 1966, the credltors requlre Kevln Roy Smeaton

to execute a Deed of Arrangement under Part X of the Bankruptcy

Act." The resolutlon did not define the terms of the deed and the

deed, exhibit 2, which was ultimately prepared, contalns terms

which are not in the resolution, nor, as far as I can see, mentioned in the minutes. The terms of the lntended deed, insofar

as they are matters of critical substance, may be derived from p.2

2

-

of the minutes, from which it appears that the proposal was the

debtor pay a sum of $4,500 for the benefit of hls CKedltOKS and

make provlslon for the controlling trustee's	fees,	whlch	were
advlsed to be an amount up to but not exceeding	$1,200.

The voting In respect of the resolutlon was, so far as

amount 1 s concerned, heavlly agalnst its passage, except for the

vote of a company which, It appears from the material, 1s

assoclated with the debtor. The company in questlon, the name of

whlch 1 s Kablar Pty. Ltd., according to an affldavlt before me,

was said at the meetlng not to Intend to lodge a proof of debt If

the resolutlon for the arrangement was passed. That, however,

does not appear from the deed, nor from the minutes.

The subsquent hlstory of the matter was that a deed was

prepared whlch, as I have mentloned, has hecome exhlklt 7, before

me and was glven to the debtor wlthln the perlod ?f 21 day:

contemplated by s.216 of the Act. The evldence suqqests, but -hy

no means convinces me, that the debtor was qlven no warnlnq 3 s to

the necesslty of execcctlng the deed wlthln the 21 days. Nhat he

dld wlth It was obscure; he may or may not have taken advlce about

It, but In any event, he did not execute It.

The contentlon made by Mr. Dutney is that I should act

under s.33(l)(c) of the Act and extend the time llmlted by

s.216(1). The circumstances of most importance in conslderlnq

that application seem to me to be the followlng. Firstly, the

matter has been handled with complete carelessness. The

creditors, who are under this proposal to give up rlghts whlch

3 .

they would otherwise have, are In my view prima facle entltled to

have the Act complied wlth. So far from any serious attempt belng

made to do that, the requirement as to execution was treated as a

matter of no slgniflcance. Secondly, there 1s no adequate reason

advanced for the delay which has occurred. The explanations glven

are not convlnclng and, even if they were true, would not be

adequate. Thlrdly, I take into account, as I think I am entltled

to on thls applicatlon, that the deed is not an especlally

advantageous one for the credltors. The amount In questlon will

not produce a large dlvldend and the arrangement would not have

been accepted were It not for the vote of the company wh1ch 1 s

sald to be associated wlth the debtor.

In the clrcumstances, the appllcatlcn f g r an extenslcn

1 s . In m y vlew, one that should fall and I dlsmlcs It.

Mr. Justice Pmcus