Solomons v Delmege - [2011] FMCA 723

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SOLOMONS & ANOR v DELMEGE

[2011] FMCA 723

BANKRUPTCY – Personal Insolvency Agreement – whether meeting of creditors resolved by special resolution that the debtor execute a personal insolvency agreement and resolved by resolution to nominate trustees of the agreement - power of court to grant declaratory relief where miscalculation of creditors voting on resolution – whether Official Receiver should be directed to reject a debtor’s petition.

Bankruptcy Act 1966 (Cth), ss.5, 27, 30, 31, 55, 64ZF, 128, 196, 204, 210, 215, 215A, 216, 220, 222

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10
Jefferson v Official Trustee in Bankruptcy (2000) 175 ALR 671; [2000] FCA 990
Re Dingle; Westpac Banking Corporation v Worrell and Another (1993) 47 FCR 478; [1993] FCA 619
Re Rooke; Ex Parte Registrar (1951) 15 ABC 181
Re Smith; Ex Parte Hamilton v Muir (1986) 66 ALR 175
Re Stillman and Wilson (1950) 15 ABC 68
Re Van Twest; Ex Parte Tubemakers Australia Ltd (1986) 69 ALR 573; [1986] FCA 449
Skalkos v Nicols (2009) 175 FCR 547; [2009] FCA 346
Talacko & Ors v Talacko (2010) 183 FCR 311; [2010] FCAFC 54
Tyler v Thomas (2006) 150 FCR 357; [2006] FCAFC 6

First Applicant:

DAVID SOLOMONS

Second Applicant:

ANTONY DE VRIES

Respondent:

MAXWELL PHILLIP DELMEGE (AKA MAXWELL PHILIP DELMEGE)

File Number:

SYG 1991 of 2011

Judgment of:

Barnes FM

Hearing date:

9 September 2011

Delivered at:

Sydney

Delivered on:

16 September 2011

REPRESENTATION

Counsel for the Applicant:

S. Golledge

Solicitors for the Applicant:

Addisons Lawyers

Counsel for the Respondent:

B. Skinner

Solicitors for the Respondent:

Bridges Lawyers

ORDERS

It is declared that at a meeting held on 1 September 2011 pursuant to an authority under section 188 of the Bankruptcy Act the creditors of Maxwell Phillip Delmege (the Debtor) resolved by special resolution that the Debtor execute a Personal Insolvency Agreement in the form annexed to the controlling trustees’ report dated 19 August 2011 (the PIA).
It is declared that the creditors of the Debtor by resolution at the meeting of 1 September 2011 nominated David Solomons and Antony De Vries to be trustees of the PIA.
The court directs that the Official Receiver reject the Debtor’s petition presented by the Debtor on 1 September 2011.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 1991 of 2011

DAVID SOLOMONS

First Applicant

ANTONY DE VRIES

Second Applicant

And

MAXWELL PHILLIP DELMEGE (AKA MAXWELL PHILIP DELMEGE)

Respondent

REASONS FOR JUDGMENT

On 27 July 2011 the respondent debtor, Mr Delmege, authorised the applicants, Mr De Vries and Mr Solomons, to be controlling trustees of his property under Part X of the Bankruptcy Act 1966 (Cth) (the Act). In that capacity the applicants prepared and circulated a report to Mr Delmege’s known creditors and called a creditors’ meeting. It was proposed that the creditors should resolve by special resolution that a Personal Insolvency Agreement (PIA) proposed by Mr Delmege in the form…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Solomons v Delmege

Details

AGLC: Solomons v Delmege [2011] FMCA 723
Case: [2011] FMCA 723
Decision Date: 16 September 2011

CaseChat Overview and Summary

Solomons v Delmege involved Maxwell Phillip Delmege, who was the subject of a bankruptcy petition. The dispute centred on the validity of a Personal Insolvency Agreement (PIA) and the nomination of trustees for this agreement. The court was tasked with determining whether the creditors of Delmege had properly resolved to approve the PIA and whether the creditors had validly nominated David Solomons and Antony De Vries as trustees of the PIA. The case was heard in the Federal Circuit and Family Court of Australia.

The primary legal issues the court had to address were whether the creditors had correctly followed the statutory process in resolving to approve the PIA and in nominating trustees. The court also needed to consider whether the creditors' actions were in accordance with the requirements set out in the Bankruptcy Act 1966 (Cth). Specifically, the court had to determine whether the creditors had the authority to make these resolutions and whether the resolutions were properly carried out.

The court found that the creditors had correctly followed the statutory process. The resolution to approve the PIA was made by a special resolution, as required by the Act. The creditors had also followed the correct procedures in nominating trustees for the PIA. The court held that the creditors had the necessary authority to make these decisions and that their actions were in line with the statutory requirements. Consequently, the court upheld the creditors' resolutions and declared that the PIA was valid and that Solomons and De Vries were duly nominated as trustees. The court further directed the Official Receiver to reject Delmege's petition presented on the same day as the creditors' meeting.

Orders

Orders of the court

It is declared that at a meeting held on 1 September 2011 pursuant to an authority under section 188 of the Bankruptcy Act the creditors of Maxwell Phillip Delmege (the Debtor) resolved by special resolution that the Debtor execute a Personal Insolvency Agreement in the form annexed to the controlling trustees’ report dated 19 August 2011 (the PIA).

It is declared that the creditors of the Debtor by resolution at the meeting of 1 September 2011 nominated David Solomons and Antony De Vries to be trustees of the PIA.

The court directs that the Official Receiver reject the Debtor’s petition presented by the Debtor on 1 September 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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