Western Australia v Wardley Australia Ltd

Re: ROCCO MUSOLINO and FRANK MUSOLINO
And: THEODORE SIDIROPOLOUS; BLAZENKA MARJANOVIC and JAMES ALBERT HUPPATZ
No. G134 of 1990
FED No. 314
Bankruptcy
101 ALR 235

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Beaumont(1), Burchett(1) and Von Doussa(1) JJ.

CATCHWORDS

Bankruptcy - Part X Deeds of Arrangement - application under ss.222 and 236 to void or terminate deeds of arrangement - resolutions not passed as special resolutions - whether arrangements void by virtue of s.213 - whether jurisdiction under s.222(1) - doubt as to whether arrangements comply with Part X - whether appellants had standing - discretion under s.222(2) - delay - interests of creditors - no evidence of false or misleading information or omission of a material particular under s.222(4) - termination not appropriate under s.236.

Bankruptcy Act 1966 ss.213, 222, 225(2), 236.

HEARING

ADELAIDE

#DATE 13:6:1991

Counsel and Solicitors Mr P. Scragg
for Appellants:

Counsel and Solicitors Mr J. Oks of Messrs Randle and Taylor
for First respondent:

Counsel and Solicitors Mr Huppatz appeared in person
for Second respondent:

ORDER

Appeal dismissed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The appellants, Rocco Musolino and Frank Musolino, appeal from an order of a judge of the Court dismissing their application for orders under the Bankruptcy Act 1966 ("the Act") setting aside or terminating deeds of arrangement under Part X of the Act entered into by Theodore Sidiropolous and his wife, Blazenka Marjanovic, who are together the first respondents. The second respondent, James Albert Huppatz, is the present trustee under the deeds of arrangement.

The background

1. In May 1989, acting pursuant to Part X of the Act, the first respondents authorised Anthony Christopher Matthews, a trustee registered under the Act, to call meetings of their joint and separate creditors, and to take over the control of their property. The meetings were convened for 23 June 1989, then adjourned to 7 July 1989 and further adjourned to 4 August 1989. The minutes of the meetings state that, on 4 August, the creditors resolved, by special resolution, that the first respondents be required to execute deeds of arrangement. The first respondents and Mr Matthews then executed the deeds and their provisions were complied with on the part of the first respondents. However, on 22 August 1990, the appellants instituted proceedings in this Court seeking orders that, pursuant to s.222 of the Act, the deeds be declared void; that, pursuant to s.236 of the Act, the deeds be terminated; and that, pursuant to ss.222(7) and 236(3), summary sequestration orders be made in respect of the estates of the first respondents.

2. By s.222, it is provided that, where there is a doubt, on a specific ground, whether, inter alia, a deed was entered into in accordance, or complies, with Part X, the trustee, a creditor or the debtor, inter alios, may apply to the Court for an order declaring that the deed, or a provision of the…