Re Gault, D.H. Gault, D.H. v Law, C.A. [1981] FCA 267

CATCHWORDS

BANKRUPTCY: Deed of Arrangement - application for

inquiry - conduct of trustee - whether trustee carried on business other than for purposes of beneficial disposal or winding-up - whether breach of trust - whether negligent - whether misfeasance - whether wilful default - whether culpable neglect - whether courts should have powers of supervision over trustee - whether court has discretion to order inquiry - whether

delay by applicant

Bankruptcy Act 1966 ss. 134, 135, 176, 176, 237

GAULT V. LAW

N.S.W. AND A.C.T. NO. 33 OF 1970

ELLICOTT J. 30 OCTOBER 1981

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IN THE FEDERAL COURT OF AUSTRALIA)

GENERAL DIVISION No. 33 of 1970

Bankruptcy District of the State of New South Wales and the Australian Capital Territory

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RE: DONALD HUBERT GAULT

Debtor

DONALD HUBERT GAULT

Applicant

CHARLES ALLEN LAW

Respondent

CORAM: ELLICOTT J.

REASONS FOR JUDGMENT

The resolution of this case involves an appreciation of a complex set of facts most of which occurred over ten years ago and which, until now, have led to nothing but delay and frustration to the applicant as he has attempted to have them ventilated before a court with a view to obtaining

relief From the damage to him which he alleges they involved.

2.

From 1964 until his business was sold in April 1971 Donald Hubert Gault (the applicant) carried on business as a metal worker in Canberra. By April 1970 he found himself in financial difficulties and on 27 April 1970 he entered into a Deed of Arrangement pursuant to Part X of the Bankruptcy Act 1966 (hereinafter called "the Act"). The execution of the Deed was preceded by the usual statutory formalities including a meeting of creditors held on 27 April 1970. At that meeting a number of resolutions were passed including those requiring the applicant to execute the Deed, the formation of a Committee of Inspection and a resolution that an extension of time be granted to him to carry on his business under the Deed and that the period of the extension be determined by the Committee of Inspection. By cl. 2 of the Deed each of his creditors granted him liberty and licence thenceforth to conduct, manage or wind-up his business and to collect get-in realise and dispose of the estate subject to the terms and conditions therein contained and under the inspection and subject to the approbation direction and control of the Trustee until the debts due to the creditors had been fully paid or the deed was terminated or declared void. Clause 4(a)(i) and (j)