eri ham ruptcy Aultoraity aly rlooLraeg tlle 1 oak? treditors meeting Toe purposes oF bart lols the Haugh get oe Sch LSAR - Peselutiron aces Sing eemees ition - Whietoer composth oom within definiricn otro sur-secthaan LY7el, wb the ct o- Whether eesolutlonm passed by re quactte matebaky oan value - Whether muaterilal particulars cmitt om, cr stated rcorrectly in, statement of attairs - Compo ten dewlarea vo.ld and summary sequestration Obder made. ETCHF ER MouLTON, Da martes: LAL beg 2 CTR DY uF, ITH WA Fo oocaete: BevRE rors? t WAUCE No. W LD? of Lig i VRE PUPAL UPD ci" ut See ee a a WAP son PEP AUSTRALIA | \ ie. Pelt. tot ef cod bods : Tht, GAR Sean. MPT Least. Fy warre: LIDGE MAR IN TATE OF birt we : 7D Delenmncee lobe AHEPE_ MS a TI svduey ! "vebVlic atbe. fu Tuly vataet Lirate 2d *. The tomb -sthaeni pute editers te.t moa me ve haon rease Leal a ig vl . bude rhe ™ une wp rr lal eealtis: 'thie solute Treu-bes oir or othe slate T thio pitted ae thie desta og ta." 'len TRUSE@SG upper rebeed ofa, otha eer skhi lt av the meer ine st tare bo amd ead Lil THE GENERAL HANKRUET! OOP VRE ot aie Huo ty 2.0 uf lobd -PONEW SOUTH WALD: Aal) YHOO SED ABLAMN 5 Fe: Pébi Pl eieHb r Monto Pehter Dx parte tT eT. OT! NEW web tooy Dx parte: CORAM: Neaves J LATC Deo beueinber Lob+ KEASE NS boi 3UrGMeN™ The Court has befor 2 rn fwe amplicattoams whic. were heard tcgether. The appli. ants -22 The Lay vorie vy mt New South Wales ("the Taw Socrety » amd eeneft ial Painance Voarporatioan Limited ("He netieral Taranoc".. Cacn appricatien seek: an order setting aside ao com sition wider Part 2 ot Che Gankrupkes ct Lara ou" ne Ach") Letween Pal Fletcher Mouiponm o¢"tre aebter") ant nis credohrts The avplicatien by roe Law Sullety tise a osethtesteat per ue ler afatmcok thee eltate of the denn ot Yrosueksar Of ber: settan alide ue - cope satienm ths applireatiens adeck tie bLanguane «f suc erty om foals ct the Act. During the culurse of the methitia, heterte:, Lh was submitted py cvnsel for the are iieant Trak oh sete he more approvriate in the citcumstanees tor an order to ne made under section 222 ff fre Act der baydr oc ras oo tibeesd tie void Tr 3S amkuret TE the apeiicatiemys 2F one eb. its l that the resolution pub to a mector er ot bli Mentor or ff Jara Patd chat tne vege lt bom Pe ater t- 1. was net pasted ry at least Pepe Foster ss dr watthe et FLe ereditecr: cresent personally, cv atnecney of sy peoyvy alo tne Meelimgs apaovetinsr on tie ec solurr + Csub-sert oon "Unde Ti, Aiternatively whowas submitted rhalo tbe uwebt or mot ped material warcticulars trom the ot abeme nt secticn 24% wf the Act cr Lncluaded tneort et and matertal particulars in that statement '§ 184 Parasbaptie woz ds (be 4 further alternative subm'ssicn Was that the rake ta Tae shuuld Fe seb aiide ao mot meind om whe Beat Piteres rs iL che creaitercs. che 7 June 7734 the Gertir, oursuank Co scenic a 16y ot the Ach, glared an authority aul orisanma Mr Feovdti at rar Shivlaw. a berivt bea triste, ta wasl oa te time 8 LS Tredicars for cha plupsocesy or -ubt "oar the Ger ana te take wer tme oruhecl abo om. reo rorty Mrosnpeolayvo ocr sen et, Tt Writing, fo exertivre Vos pewers commer e- a hy the aurhionisy and calied a meeri ait toe der Por a .yendiftee bu al lordan + with bavisien oot eee t fob to Ber, "trotdp AMS iv, hone Tash, thr fer tist sore an affadavit 'eriivie y+ oan amnexen staterant oof atralr i o.t setup tanw oe ocmcth Form plo oan .cnedaie boote me My. weap oe PuLos. The ode orerp swore tTrato the enaete. statement oir ef nis mao tere amd pelies 4 CL hie affalbs ay ab Jane 19r4, 'The summary diselosed ar amermfo oor f225, 27 rerpia ty creditocs tall seeing unsecureal, assets of Cote Caidentairie in Yart Vout the statement ass ash ve WioeCurei creditors AaYol he sm funts L tii + i t + " WNL TD te bt er] Sy lyou raland Eanki-y tele Sold chard Ale. Amora FPureitiube ana Sobrery Pry terete namgtead rergman and Feeve, ontroir ire eel + ' . re i ie Tay horiten Lo and ®& Ea Limitera Tainees "ss sme Lee th Lr Mure roy Tun Lets oS mn Mursery Fry camtted 112 Pada Fetuens 1,740 "os LIME SOY aa vhaphoan andoser Phe Limit od 1,574 amd Ue gry Tim peed Det Aust e alle sand srexanter © und Joy N Selman Tn, eel hoeupac panking Slr. estan, 4,607 Banker i Westuas Bar, em Dab. bares t,he d. kuse Li,tury T YP Hampeon O,tunr > Frantitlir L6,Uhl Martwhlgnt ard B- lace tate - - Wiallam Gaern Stott Ard flame te 8 ame tte Reet) Camgoeil Stace io7 doprer ath tae Pr o@ Meoulron yt paradbapt fort bare Propo hte f etinlbes Caem ot thate@ms or atfealces be duates partic tare te he tuenad-c-7 46 rontandent ctabiivtiies amd Piast lities nol seecitiscd in oa previcus bakh of fhe chLatement Vrvter Ural bapagtarh tise mebtor "risctlusei 2 number of personal guarantees as follow. - Heneflelat Fainanee Corr batiet shat, ot Limited or accounb 3 Pacwkadtira Pty Laipater Gemma Mascal ae Prilomena Mascat 77, gue feoyce gemma Hecgiae 'No at iunn scated Th ommal vatt uf Phe ot ateqerr ble fen e aro Le teen Toh titer Logehe moh tae Lltaed ot eee Bek a ve abt fF tie Ur ahement - Feeqnn cf indemnvry feom yon $28,005 ababoanmbors tu be wtieial Pane Corperatrver fipited Fiant oot keederentiy pein bri tase 3 SL ta " fatemenn of alrairrg abow ou. sllezed that bis Vow és] Mectur nal oduriaad the aa ata? ee Lise Yeab Crbe late Lk DULLNESS ln bagcturrschip as 4 Che Meeting oF leedahars tore elas w cn ff Tim: ede. Me boob umith was) Lech sd inate mat.. . PRO Minutes wth the weeharg, sodreed ty tho oe taboman, ' Peesent oat oofne meeting Agalmot the cares 08 SOME IE COTE Phe lem ala Eb Weare Abe Smad, eect len T !u salir Tore abtieg ot the bebieve tee trat pergam op foo othe eredator Phat bh cet som bopper centeu, That part ct the minures cearz - Mr BE OH Smith on pehalf ct tus Lonte odie Trus heer Me FP Pr Meulror - bebrer Mr or. Fokerts Debtor: 3 accountant Meo DD. Piurharason - orton Finita apd vo Mrs EPiapner [srld - bepeesenritg the lL = beeper tit ther bested a ard 0 ea Mm Hampson - Reteerenting bimselt hay mer o- heprer-neing 2 ari fh Isnt paurrted t, | : ha Tisha - hespre sent tried formset liad Birnancs oreopatro Lomita Wteb tu ceen "Te FD Here 2 + Pepe ee centang aire it Lat ,dte "ue MIPS Lia ther be oer. Teal 'bo oon tnits faniedt the Polliwing bieate Nae oo a reditiss am Pave. | Tobe Fo Moalten reyin feather - Philip i. Motrin preva bi rest ts ranl oo pitk rev perme; te Awena "urniy abe "hate warn Perer F Markhy and to Ch} 1emarn reélen+ M Rose Cha tetan "Yerbrarles Frarpkli "Nate itary Thee Wovez ork David Pacnuardsen Muster alia amd foe David Si Tacden "easlare! Bankire herr Tomiie Gx 17 Socobdar a re the munates the debi st Therm orp bia PO foe mM@eLinpg cer tne clrecuastamees Lleadana fo 13 fananc1lal pesikisr, the debtot makins avaLtanle ote tirse bres ma mt a wrethten statement a. fe trios wircurstanrcre o. 228 statement wveRaied that bie darray had neem aloa FH Leiter of the ceereme courh of it, Acala-s lve. amd thas cetepeern Lye 2 and Lysoode mad pupih mp oa larde oonvevarniclig cba ih lot. ut reas err, LSet arel PO75 me teak pear dase posture Mate CoorerPhres ara buclt ve oa chabwiars cathas sttub and moa. boro oe slid Ih eee ales tnvilved ott ith aris Angaged in tlzchastmt and devebopine pecmeebreas oir the Sydney metropolitan area. PQ llowlrr ai iloageeemernt vwieh others odrvesved, hne deptor bouk cver the assets uid liabilitie- of certain of bese companies, oirireulties 4PuSe@ ln haangmy Poe meee siary dove lopment cpesvals. AE the same hime me vas sub-dividind ana selling properties in Zoeensiany Many fF ta- pre @etetes riclulwag those tela it Wak pany Mares were Catane- lt ry Liars Maue to the Tent ¢ persons For rch pet tan actin. as aA sGlteater, lines Law SOeLlely Livestryated the clicumatances wv. whi. athh loans Wer? maue and as a result the winter commenced tl lispuxe wt appremimap Py SL,2ue,00G grorehh oof praperty Tae wharuhboey Cemmittes or tne Taw st ogrety Tound ttat the dentor has acted Tmpecoer iy oan TA ADEN tne obaais amd ointosedi oa tine oar PL,u00. Cr anmeai tne Court LF Agneal ui New South Wales oegere]d that the 'debtor' s mame ne struck ult me rold out sclici1esrs: Law Society so F New South Wales ov. Moulton (198i) 2S... Ro 73a. The debtor said that at tne time that hoe euree oof oipecme thus etded apruptay ons owed 2abotantial derpry aneluding legal reres. He then os bi his heuse., He further sald that at than time he had several ipvestrentc nied tite expe ted rh ald tealirse aPeroximatiay CL,000,0 0 over aoperlod wf elauntes i manthe Nut That Flat expectation hac wot Deen tealisend. he lertoe,''s statement if attaires 45 ther tabled and tre debtor answered questiens put ota him. Atte recorarny followiras PELALD Tua tare ebbae as rent, Feel mettabe- be lt unde ties neading ""hesolbutLlens Boo omni further tpeeisien Vas rediatred ly tis INMeering, The fullowites peselubecme eee pir Perward ov the charyman. SPPUTAL REP OL LON That the creditu)es. or Faul Pietenestr Moulton Above pt al iiPust hbo under Bart 02 out the Bankrurtey Avot lone, true tebe oul ohbenm abe set out hereunder: a The * ompositiom be be contirued for a MaxXiMum perred of feuty months Crem oYth June 1984 of as extended ty crediturs oon uweneral meetirmr. po. That within 90 dava cb the late uf Lie humpgs3itiun the Trustee peaneiltes frem [ft JT Moulton cash in the gum of gle ,545 ce. At tne exrarathor oof tre 4 omenth weed, Thouta @htendet hy credtices in uererasr Mlthing, sayments Malic ta iter. ake ta pe accepted as aun ruil s ement out tiie "laims Ot those Ttredaitors to o.Ufk Tane l2ed. A. Dheg oe mls iter tStmirat month werlud.s, or subsé@quent ars extended bv creditors, n.avind slarsad. e The Truste nD 15° given otewer to call a meefriid bs € to otrsliters as he nounmsiders nertessarv'. Froposed by: Mt oF Robpeirs meecnded uve Me M BE Horpee Ur ivnad rersrained trom voting. Me Richardson ard Mrs Lasker Leird terresentiny ~*~ Ctetitars in oles eb and $103,550 Lh yale voted afainst the resolution. [ne resolution wae pessed ovo thee bemalnarnd i erated of be aru beVresernt tha Soll,de? ain vale { the ° . OPDUIAPY RES OLOPLohs 1. 'Thal Mr Kevan heenard shi1elav or Leth Fizoct, 68 Path Street, Seabey be appointed Trustee For the purpuses of ronducting the compastt pon' Proposed by: Me thop, et Ses dee pys itp Vieswie & 2 Raickavdooun and Mes Pisher vined From voting You resolution was cassed. ue That remunerirron cro rhe Tomteolling Trustee me pard accerding to the ecnrrenc rabeo of the IInsulvetctvy Feactifticrers AS i eetabioan oF Atvetealia armed that huis eXPenteg re paid . rreposed py. 4p Hopret Lewonded hy: Me Liewl ck I esoks Nyhan an2 Kichatdton amd ore Piss Led rerraired feos voting The resoluriorn was raleal Although the meeting had heen held on 29 Tune 19R4, a certificate that the resolutions tan been passed was not signed by the chairman of the meeLiny witr: LL ty 1954 and 20 was not filed ino the office of the besisttak oan Bankruptcy unt1zl i? July Lse4 Uc rteseaa wae, however, raised whethe: the 1gning and tiliny was carried wu "Fortnwith after tne rassing of the resclutilnmy as peaitted lon vy sub-sectian 204.7) oF khe Act. tn 23 July 13954 rhe tua aprlicaricns presently befocse the Court were fr1icd. Whe arolicat rot made Ly the Taw Soclety and the surrc+ting atfilavit were verved on the do, a depict on 24 Aust 1584. The debtor, oevevec., Jia mor appear at the hearing antl was mlb peprecentel Lite aDpLLtarion made ov benefie cal Pimanecs Gan mat served on tte debtor ana othe Cour vas ated oto ean, ise the prover 0] conterred by sul sectiens of. 7) and 2latc; ana iiopense with service on the inbtecr "fF nueftice af the applicaticr. As tl sther application was seived on the uebter aml the two applications raise s.abstanrially the same issues 1f is, ai my opinicn, appropriate to dispense with serv1ee os the webror of tne application mule by Beneficial Finanus and '4 Keteore conotlering the arqurant- that were adyatr sa in suppert «f the upders sougthh, some peferente soolld 26 mage to the terms of whar was proposed as aA ou Mpusition hetweén tne depter and hrs tediters urudcr Bart loud btu Act. A cempeo sition For the ruercse@s of Part ocr tmn Aerts "3 arranuvement cook peeing un Abtagwgement enteced int. for tne purposes oar a seine Ladle ct weich the treditors or a deft wan) obu Sab &4,68 To accept Saymernt of tne debts lus tu Chem by instalment 37 o2 ty. agree ty accept, tn Full sat 3f the dents duc to Prem, pet. ot full amount of those debtu, wnether an the form of money or other property and whether by instalment 4 of ulbherwree " bobo OL we terms cr the cumbosirien pat to the meshing of trediiors on 29 June 1984 envisare toah Poe Freastes 4 receive within GO day. ut the dale of the clalasaiticn tine sum of goer ,f00 lnocash from ite Tort Mauilton, Qo hee ther ont the dab, Tor dastraibukien acenast hta ered tar. Attnough Phe minutes of The meetirgd pe cra haar Me Ld Fopper (a frrend oc. tne vankheup ant ao uredibtor tex £40,000) and Mr P.F. Moulton «a brother of Fhe gebtor and aoocrediror for $69,900) wenildh stand astie bere combined claims if $150,000 vlug interest, there. ls lw maitian af this te the comeosition itseif. ery The composition 1s te continue for a MAKiMUM Berivd of Pour months trom lu tume LyAd oe such eatended period a» the creditors might agree upon in general teeeting (clause a). At tne eaniratian owt thet oerisa, WE apy ayreel extension, the composition 1s LG teruinate (classe ad). Twas untormed that the ce:rog of four months had not veen extended by the creditors in yeneral meeting su that, according ta its terms, the composition Lad terminated relor to the hearing of the present applications. Io owas also anformed that the sum ot $16,500 had nt been wari to the trustee thous iat was sald that cvavment nad pecn withheid pending the sutcome of these pro ieeainas. l have grave doubts whebher the caumetioitiln ois peoperiy denctibed 45 a compusition within Fart 4 01 the Aet and at may well be void orn that account. Re Venetoulis, Es parte Valeri Bra. ($1976) 1. BLL. lS at piesds. Hiwevet, to the matter va, mot arauued ¢ stale further but rroaceed oan the Lacis tno a Celtel ein within the meanirg of ret co oe nd peILet Lo VhaAT wast proptsest was rari #oIr the ALL. Lotter Fhem hea ooutidsrabres ot the Guest tur whether the gecsoluticn thar time comuesa liter bee ane ep th ot was passed oy Une peepisite maleediy of ceridaitews Thee belevant warts of tree minutes of tre weetinyg have airaa.s Leen set By vitbus cr subvoseo tier a bothe Alt, o'r minutes, vhichn been sidned im ace eance wetu seet1en "UF, are mrima 2 evidence of Lie mre ceedings ato tne meek irs Mie coetafreabe of the passins -f the ste. tan reoclul ton top Uhten bebere 2 has pet Crile 1s aise Face vidence that the seecial resoluticr was luly at tne weenhing (sub-cactran ~'3(1)) The MLiutes rece sd that 'hEee teed ir ouss representing Slo" .560 an value voted agatnst Che peetinticy. The infererie® may 62® drawn From what r that these crediters and debts were c Naneys slampbet 4 Australia ard canking troup Limite the amounbs wf stistt New Jéealand Aapbearo dm tee tllmites r ¥ Mee be Sher tiv ,3tu t > Tt may alz Te arteéeresd feo those minutes thar the Len Ceediturs repreocnring SLL, 37 de VAL wt abe pl lrob ted as Ber voting 21 faveur of the te elution weee the ceedire.. thier than those menfrioned above wre oe pate ahmed mothe araure ta This may Pe demonstrated by adding tne rotaisy of s23 and $183,372 appearird 1m the ,arts of the minutes that cecord thove present and the names of the creditors . ne nad loiged proxies and suistractons therefeom fue amo of $103,550 referred to above. Tf those fiuures are accepted, tne creditores voting in faveur of the resolmtirer weai2 have represented in value 75.07 wer centum or the value -f the debts of all cr mm ditors present and voting at the reeLing ana fne fesoluttir would have been validly passed us a Special resolution. What took place at tine meeting or credit 2s 4 alsu deposed tc by Fay Anne Friscie in her attudavit weorn ly July 1984. Mrs Friscner des ripes herself as tine Feonverzes Officer for the Fidelity Fant oof the Gav Society. She attended the meeting of creniters on 29 June Land cn hehalt of the Law Society. She says that, wher fhe motion fur acceptance of the wemposiftion was put fe the meeting, rua di cr \ ia Or a Puy whose debhs totalled 3108,681.97 voted against the resogluticn while creditors whose debts tiulalieu 5597,d964 voted in favour. Mrs Frisener .oneludes frim this that the resulution wat mut passed by at least turee-fourtn. an valwe 'ot the creditors voting wn the resoeluticn. This conclusien cannot, however, he supported. If the total value uf the debts of the crenmitors voting on tne resuintrun was $500,778 (S10R,HS2 + $397,846), the cretitors wnese debts tetallert £397,898 repessented?d 738.5 per cerntum. According to Mes Friascher the debts tetaliarna Tneluscer the Gert of 290,600 Que to Mt ET Hr whit he adeLk of £e0,900 due oto Mr PLR. Moulton as smowh in fhe at btor's statemeut cf afrairs. Tne depror, ace ding tu Mes Frisener, informed the meeting that those debts curried interest, tn the case wf the debt ae to Mt hopper intetest at the rate of 16 per centum per annum fut three vears, and in the case of the debt due to Mr P P Moulton interest at the rate vf 14 per centum per winuia aloo ror theee veara. The chalrman, she says, Tien ineresased the debts due to Mr Hoppe: and Mer PLR. Moniton by $342,u0U and $25,000 respeitively as representing atu lt iptelest ani, in eonsequence, icreased the chal moretacy value of the ereditors wo han voted in Faw au oof the resslubian te $465,050. The latter Peele Sebeesentes al least three-fourths in value or tne creditors vehling oom the resolution and, in consequence, the resuluitilon was passet by the requisite mavtority. To support the corrention that the resolution had not been passed by the reuuisite matority in valite, counsel Lor the appaireants pointed tu tne amounts Gr lntere © which nad been allied tc the debts a: Tr Hoprec avd ide Poo "Moulton as disclosed in the debtor 2 shatement tr atfairs, contending that those amounts exceeded the ameunt. creoperlv due. Thus, if ome alrceprus that the peanctpal sums due oa Mr Hopper ant Mr P.R. Moulton were situ ated SH, WOO respectively, the figures -Leown in the minutes are explicable only oom fhe basis, that amounts of $£0,470 and $33,640 were added by way of interest making the debts $146,470 and $93,610 respectively. Counsel subuitted, however, that interest on a debt of s4u0,un0 at le per centum pee annum tor three years amounted to s44,l20u (cor, 342,000 referred £9 an Mrs Frischer'; atfidavit, not $6u,d70 as mentioned above, making the tokal indebtedness to Me Hoover and not $la: ,47u as snown un the WLNUTES. Simllarly, 1t was submitred ruat oirtere sr on the deft oot seu,0u0 at 14 ver centum cer arnum fob three yeare that being the rate rhat, according tu "Mis Frivenér's affidavit. the debtor nominated) amounted only to $29,20Ub maxing th total indebtedness to Mr P.Rk. Moulton $45,200 ami not $93,640 as shown in the minutes. (Even 1f, 16 was said, the interest on Mr P.K. Moulton's debt 18s calculated at le ver centum per annum cor the basis that the minutes uf the meeting record that rate in relation to that debt, the interest would amount to $28,499 and the teLral ardiitedness to S$BB,R800.) TE the fiyures are adjusted accordingly, seit was submitted, the teésoluticn was not passe. 1! rhe reguisite aajority ap vaiue of the creators present and vating at tne meeking. Section 261 of the Act deals with the admisalen and rerecktion of claims to vote. It erovides - "201. Any quevtisn as to the eight of a person cu vote at a meetirg undet this Lavicziln, ct as 14 the amount of tne depn im resherr of when 4 berorn 1s entitled to vote at Ten a Meet ait ' shall be determined by tie chairman, who may, 2 ne thinks 2it necesrary te do oa, Adiourm tt 1 ot mMeehine fo A perrod, wok exceeding b4 dave, ft enable him to investigate tne matter." The minutes ao not expressly record that the chalrman vade any determination as to the amount of "he debt ir respect of which either Mr Hopper oc Mr yok Moulten was entitlel to vote at Che meeting. lt may be anferee id from the minutes thar he did so determine in tne amounts af $140,470 ard $93,640 to which reference has been made, Brit even if such determinations were maie, thev are not unexaminable: ke Levy, Ex cathe scholefield tiociman and Sons Ltd. (1980) SU F.L.R. [9 at pp. 1i%-3 It became akparent during tie lourse oF the nearird that, on the waterial before the Vuourt, 11 was ispossible to reconcile the figures in the affidavit of Mt3 Frischer with those set out in fhe minutes of the meeting In those circumstances the parties who were represented Lbefure the Court turceded that, where there vas a lifterence between the two sets of figures, these sek out in the winute. cf the meeting should be accepted In this caineebtien Tf thank at ap tOpelate toy say fea Chat no evidence va3 placed before the Cuurt either from the chairman of the meering or fhe trustes co eerlain the figures ot tu clarify whar did in fact tale place abo the meeting. Tt 1s impossible to say whether the unsatisfartory position which has been disclosed arises from the manner oan which the mweetiny was conducted or from dericrencres in recording in the minutes writ tuck place. Do.annmet refrain from commenting, however, thal, mommy view, the Cuurt was entitlea Lo receive greater assistance than 1t did cron the trustee im ascertaining the relevant facts. Tn view of the unsatasfaccory state of Lhe malstlal betore me IT am not prepared to make a pe .llive finding that the resolution accepting the composition was nut pissed ony the requisite piaturity im value of the creditors vresent at the meeting and vohing on that resolution. However, .f Clearly follows ftreom whalb JT have card chat, im tetms of sub-section 222(1) of the Act, there 16 a very series dope whetner tne composition was accepted by a cpeeral rea aaition as required by section 04, Such oa finding provides oa sufficient basis for an order declaring the commu st hier youd: See gub-sectior ules ' 18. ne applicanrs also submittea that Mere f acral Finance was 4 <irediteor enbetled fo wote aut the meeting ain respect of its wuebt oF at least sdk9,000 but that 1b was wrongiy prevented from deiner so, The addition of it- dene Lo the tatal valte of creditor: preserl and votiny on the resolution 43 showr in the minites of the meeting and te the total value of trediturs vol.ng arainet tne resolutaien (that celng Che Manet in o earch rh would have vened) strula have resuited, so it was submitted, in tne pesulution ost being carried by the ceuuisite majority in value. Valentine Latkich, the Collection Manager of Beneficial Fanance, in an aftidavit sworn on 23) November 1984 and filed ain these proceedings has denosed that a representative of othe company attended tne meetiny of creditors on 29 June 1984 but that he was not permivtel be vote, the chatrman of the meeting stating that the claim Ly Beneficial Finance was in respect ot a cantingent Jdianilaity only. Tt was contended on behasf of Beneficial Firance that 1ts tepresentative shouid have been perattted to vote at the meetinz as it was an actual, mot ao contingent, ereditor of the debtor. The claim of Beneficial Fainanes arlers Under Ewe de#ds 2f guarartee dated respectively wh Stine i381 and 4 April l9a2. Under tne earlier sf hthigse leeds the wepvtcr, togetner with certain ODneY persons, Miatanteed to Beneticial Finance the due eceravrent of brincipal and interest in respect or a lear of Sade, made by Remeficral Finance to Leymar Paclaaing Phy. uimited aml oecured vy mortgage over certain land oweeli cy that cc mpanyv Ry vlause 7 of the deed if was .roviliced that the ptrantees were to oe principal cnliyatieuns and were met or. be Lreated ay ancillary or collateral to any other obliaations. Ry clause 10 the liability of the guarantors was nol bo be atfected hy any securities taken bv Beneficiat Finance from Leymar Packaaing Pty. Limited. The second af the deeds provided for a further advance of $89,000 by Beneficiai Fananes toa Levmar Packaging Fty. Limited, for the varilatien or the mortgaue bo cover the adzitronal advance ald opligations of the guaranturs to extend to the increased amount and intérest therecn. The evidence also -hows that folloving default ky Leymar Fuckaging Pty. Limited and a wemand upon Ihe debtor and the other oruarantors, Benefirctal Pinmance rtommenced roeceedings in the Supreme Court of New Seuth Wales ain 'D November 1983 ayainst Leymar "ackayionmy Fry. Limited anid othe guarantors, ancluding the deboeor, to recuver the sum cf $489,007 together with interest thereun, The debtar filed a an, defence con 27) February 1984 ian which tes dra not adwit the ailegaticens tnat Leymar Packaging Pty alliitted was in default or trat the amount due to Beneficial Pinancee was $489,000 plus arrears of interest ard ino whith we dened that he had been served with a notice purstiant £O sechian 57(2.:b) of the Real Property Act, L9v0 ONE Wo) as amended There 19, however, nothing tn the material before the Court fo suggest that the debtor has a defence to the pt steeainyy. In an affidavit sworn on 20 July 1384 Mt Latkir'. deposed that at the date of his uatfidavit the amowi:t due and payable by the aebror to Heneticial Finance under the guacartes was in excess of the sum wf $685,009 T am satisfied oon tne material Khe date of the meeting eneficiaal FPanarce creditor of the debtur ana that 21t @escribe that cotrany as a contingent creditor or to determine on that yround that 16 was mot entitled tu vote at the meeting. There was, however, in my view another around upon wnich 1t was proper to conclude that the company was mot entitled te vote on the resolution to atrept the camposition. That ground o15 fu be found tu sup-sectron 198(4) of the Act which provides - '(d) A cyeditor 15 mat entitled to vute (athervise than in respect T Lue election of & chalrman of tne meetang?, unles: ne has made known t> tne chairman particulars of his debt." fee) - Lt ws cleat that barlreulars of the debL sald tu. be owing t5 Beneficial Finances had pot peen given to the chaltman cf the meeting. The minutes record the amount of the indebtedness to Henefieial VPainance as 'Unknown" and no evidence to chow that tuat statewent was inaccurate has been placed betore the Court, Counsel for the company conceded during the nearing that the representative of the company was unable to state the precise amount cf the iekt because of the meet to calculate fhe amount Gf inherest payable and to ascertain the amount by which the deht was te ge redue ed by reason wf the saie of the mortgaged property. Aithougn the conresston dues nolL Mean that tre dett was contingent or ao debt the value oof whic was not ascertained in the sense in Which that exprersion 1s used in sub-section 198(2) - see Pe Levy; Ex patrre © polefield Goodman_ani Sons Ltd. 'aupra, pp.lll-°:, Benetictal Finance has not establiisned to my satrefactior that at nad complied with sub-secticn :98(4). The avplicants sttomissilo: on this asbect of the marter 1s, therefore, teyected. it remains to comsider whelte-t Ene dehtur omitted material particulars from his otatement os atfarers ose included therein material particulars that vere Incorrect. sae Ihe evidence establishes that in uis statemenh of affairs tne debter tailed to disclose the cibee't amounr due fo the Law Societv. The statement of affairs out that debe at $35,000, At the meeting the Law Soviety's represertative explained that the amount of the debt. was in Fach $632,947.82 (according Lo Mrs Frischer = affidavit) thomesh the minutes of the meeting recerd both that amount and an amount of $63,950. The eviderce also establishes that in his statement of affairs the webter failed to disclose an additicnar debt due to the Australia and New Tealand Banking Group Linitea. Adept to that bank at its branth af ranuataos Point, Queensland was shown in the statement of atlLaits at $4,277 ani was described as a personal lran. The minutes of the meeting disclose that the bank claimed a debt of S2h,ud0 due Lm a Joint accounmk ~f the debter and ht» wife at its branch at Noosa Heads, Queensland. Mes Frischer in her afttidavit puts the additional debt at $27,334. The minutes recora that at the meeting the debtor acknowledged his incuebtedness to the bank but stated that he had understouwd the bank was claiming cniy against his wife. The debtor = statemenn ot affairs, altriugh 1t disclose. Enat a debt was ovunyg to William Gien Stoln amd i Nancye Campbell Stott. did met disclose the amount of the debt. Accurding ta the minutes, a letbet nad been recerved 23. by the chairman from the solicitors acting for Mt and Mrs Stott on 28 June 1984 in which the amuunt of the debt was stated to be $1?,6:%, The deptuor sadd fhat he had mot included any amount ain the statement wt attairs as he was not then aware of the extent cf his indentedness to Me and Mrs Etuth. [t 185 aiso clear trom a perusal ot tne original cof the Gebter's statement uf affairs that ne vid nok disclose therein that the debts owing to Me Aopeer ana Mt FR, Meulton had accrued interest amounting to som iT ct wv we re) > thousands of dollars and were confinning to acrrue titerest at rates of 16 and 14 per centum per anmuim respecrively. Further, the debtor arcluded incorrect particulars In the statement of affairs in eelation ty the eiubstamtlai feblL due to Beneficial Pimanee by teterreng foi ae contingent only. Tre applicants have es tatLlished to my satisfacrion that the debtor made material cmassiuns from his statenent of affairs and included therein anformation that Wa > uncorrect. lt is mot, IT think, of Significanee in teaching a conclusion on that uuestion te take into ac ount what occurred at the meeting of creditors in relation to those matters Fe Morris; Ex parte Adams 11480) 456 T.L.k 41. What the Act tequires is the =zubmission by the debtur to all a4. his crediter 3 (mot only those who attend the meering)s of a ecorrecnr statement of his afta1rs. This tre webtur Farled tu do. That the matters omitted o: misstated were material as, I think, self evident. For the teasons sef out abaeve 1 am sutisfted thar the composition should be set aside under sub-sechion 259(2) of tne Act or declared void urder sub-sertiem T2202) ur sub-section 222(4). The More apprIprYlale cCslboe ls, L think, fo declare tne deed void. The Court may, nowever, eanly make such an order under sup-section 22214) 1f 1t ais satisfied that it would be in the interests of tre creditors to do sa, Tt as conventent to consider together the guestion whether 1t 15 in the interests cf the crediturcs to declare tne deed vo1ld and the question whether oa slaamary fi) iT we Lu itis . ~ - r a sequestration order should be made against th deptor pursuant to sub-section 22217) There 1s ample material Eetore the Court to justify the making of such an order. It 15 clear that the debtor is tnoulvent In this connection 1 may be neted that 1t was put to the crediters at the meeting on 29 June 1984 that the composition would result in the creditors receiving of rhe order of six cents im the dollar whereas they would receive nothing 1f the debtor's estate were sequestrated. Had the debt ty Beneficial Finanee heen taker iantu account, the amount te be received tinder the composirtion would have ceen of the order oof one cent te two cents 1 the acilar. Although 1t cannct, on the materral refure the Culmt, be postulated that the treditors wie bi Necseosurily ve financially better otf Lf Liu aebter » affairs are administered in bankruptcy, the material befure the Court as to the debtor's property, trade dealings aml attairs makes plain that 1t would be ain che interests of the creditors that there pe a full investigation <f the deptcr'+ affairs which the raking of a sequestration order will facilitate. IT am satisfied that 1f 19 in the anterests af the creaiturs as a whole that the composition be derlarel void and oa sequestration order be made. JL thueref be, 29 order Sub-secttun 22209) provides that the waking of an apolication by the trustee or a creditor Lor t sequestration order under section «22 is, for the purpose of the Act, to be deemed to be equivalent t> the presentation or & CF Af ditor's petition against the dektcr but that the provisions of sub-section 43(1), sections 44 and +7, sub-secticens S2(1) and (2) and Part "EIA do not apply in relation to such an application. In ke Lees, Rx warte Young (unreportes - 3] August 1384) T expressed the view that Sub-section S201A), which limits the Court s power to make a sequestration order under sub section 52(1), 19 tnapplicable when the Court 18 exercising the power conferred by "sub-sectien 22207). i adhere tu that view. I shouid perhaps ali that, if, contrary to the view I have expressed, section 52(1A) 1s thought fo bé applicable, I am satisfied that the value of the property of tne debtor that would be divisiple amongst the creditors by virtue of section Lle 1f a sequestration order were to be mad# is lees than ¢lu,und. Paragrapn 156A(2)(a) proviies that, where at tne time when a debtor secumes bankrupt, a rteyisterel trustee nas, under sub-serfion LS5eA(1), consented fo ack ws. the trustee of the estate of the debtor and the carcent has not been revoked, the reaistered trustee becomes, at thah time, by force of che sub-section, tim trustee of tn. estate cf the bankrupt. Section 160 crcevides that, 2 mo Ww o a a hed faa E be iad rw Cc it) + ir) ng there 1s mo redisteres wo ls the ftrustee of Ene estate of a bankrupt, the Official Trustee in Hunkruptecy is, by force of that section, to be the trustee cf the estate. In the present case no registered trustee hav consented ta act as the frustee of the estate of the debtor ani in those Clreumstances the Officrai Trustee ain Bankeruptey as, bv force of section 160, the teustes of his estate. Tn the crrcumstance, of this case Lams Ff cyinion that 12 15 apprvpeiate to order that the costs of the Law Socr1ety and Beneficial Finance of the appireatlions before tne Court be taxed and paild out of Fhe estate or fre debtor iT as if they were the costs of a petrbicnimyg creditor. Lf also ustee ne pald oouk ct the T certify Friat This ared 'HO See lcediieg & beafGs ate A LE. Lope of the Reaeurs for Judgment werein of the Feo wodk aie dr Tut Lite Nerves. Ceithy Hy Kegare - Sonate Datoet. 29 Pecemoer Leh