GR, s&s st "SHIDGMENT No. GG: LD Simo CATCHWORDS Bankruptcy - joint Deed of Assignment under Part X - whether deed void - executed pursuant to joint meeting of joint and several creditors - whether in accordance or compliance with Part X - Deed not void. Bankruptcy Act 1966 ss. 187A, 188(1), 222(1). Acts Interpretation Act 1901 $.23(b) Case referred to - Re Forbes (1974) 24 F.L.R. Re: DAVID M. SCHUPPAN and BARBARA SCHUPPAN Ex parte CHRISTOPHER THOMAS DALY No. 4 of 1985 Part X Forster, J. 24 April 1985 Adelaide. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIAN DISTRICT REGISTRY GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF SOUTH AUSTRALIA No. 4 of 1985 PART x RE: DAVID M. SCHUPPAN and BARBARA SCHUPPAN EX PARTE: CHRISTOPHER THOMAS DALY ORDER Judge making order: Forster, J. Date order made: 24 April, 1985 Where made: Adelaide. THE COURT ORDERS : Declaring that Deed of Assignment dated 19th February 1985 executed by the debtors is not void. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIAN DISTRICT REGISTRY GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF SOUTH AUSTRALIA No. 4 of 1985 PART X RE: DAVID M. SCHUPPAN and BARBARA SCHUPPAN Debtors EX PARTE: CHRISTOPHER THOMAS DALY Trustee REASONS FOR JUDGMENT CORAM: Forster, J. DATED: 24 April, 1985 This 18 an application by the purported trustee of the estate of the debtors pursuant to a Deed of Assignment made on the 19th February 1985. The applicant seeks an order that "The Deed of Assignment executed by the debtors on the 19th day of February 1985 is void, or alternatively, is not void, pursuant to s.222(1) of The Bankruptcy Act 1966 (as amended) on the ground that the said Deed was not entered into in accordance with or does not comply with the requirements of Part X of the said Act". The debtors are husband and wife and were business partners. As the partnership was in financial difficulties the male debtor on 26 January 1985 consulted a Mr Owen, an employee of Coopers & Lybrand, a large firm of accountants. As a result on 28 January 1985 the debtors executed a document in purported pursuance of s.188(1) of The Bankruptcy Act. The document was in accordance with the prescribed form except that the prescribed form 1s appropriate for a debtor, not apparently for joint debtors. The form executed by the debtors 1s in the following form - "In pursuance of section 188 of the Bankruptcy Act 1966, We, David Mark Schuppan and Barbara Schuppan, Proprietors of 145 Lacey Street, Whyalla in the State of South Australia, hereby authorise Christopher Thomas Daly, Chartered Accountant and Registered Trustee of 385 Bourke Street, Melbourne in the State of Victoria, to call a meeting of our joint and several creditors for the purposes of Part X of that Act and to take over control of our joint and several property in accordance with that Act. Signed by the said David Mark Schuppan and Barbara DAVID MARK SCHUPPAN Schuppan this 28th day of January 1985 in the presence of Rodney Gavin Owen BARBARA SCHUPPAN R G OWEN I, the said Christopher Thomas Daly, do hereby consent to exercise the powers conferred on me by the abovenamed authority. Signed by the said Christopher Thomas Daly this 28th day of CHRISTOPHER THOMAS DALY January 1985 in the presence of Rodney Gavin Owen R G OWEN." Mr Daly who 1s a partner in Coopers & Lybrand duly called a meeting of creditors which was held in Adelaide on 19th February 1985. At this meeting the male debtor tabled Forms 11 - Statement of Affairs - one for himself, one for the female debtor and one joint statement. In due course a resolution was passed "That the debtors be and are hereby required to execute a Joint and Several Deed of Assignment within twenty one days of the date of this meeting in pursuance of Part X of The Bankruptcy Act 1966, such Deed to be in the form as prescribed by that Act." The debtors duly executed a Deed on the same day the operative parts of which were as follows - "{a) the debtors convey and assign to the Trustee all their joint and several divisible property within the meaning of Part X of the Bankruptcy Act 1966 UPON TRUST to deal with the same in accordance with Part X of that Act for the benefit of the joint and several creditors of the debtors and as to any surplus after paying an full the joint and several debts and liabilities of the debtors proved under this Deed together with the costs charges and expenses of or incidental to the execution of the trusts of this Deed (including the remuneration and expenses of the Trustee) UPON TRUST for the debtors their executors administrators or assigns; and (b) the Trustee accepts appointment as trustee of this Deed and the conveyance and assignment of the said property upon the trusts hereinbefore set out." The Deed of Assignment and the Forms 11 were filed in the registry on 25 February 1985. On 26th February 1985 the acting Registrar wrote to Mr Daly saying that in his opinion because there was only one meeting called of the debtors' joint and several creditors instead of separate meetings of the creditors of each debtor the Deed of Assignment was void. The acting Registrar referred to the case of Re Forbes (1974) 24 F.L.R. 87. The present proceedings are taken as a result of the acting Registrar's expression of opinion. It should be noted that the three statements of affairs I have mentioned reveal that each of the two debtors has no separate property or assets and that each has only one separate unsecured creditor and no separate secured creditor. In each case Form 11 Part II states that there is an unsecured liability of $2,500 to the Deputy Commissioner of Taxation being an "estimate of income tax owing". It should also be noted that the Deputy Commissioner of Taxation did not attend the meeting of creditors so that all creditors who did attend were joint creditors and the resolution which was passed was that of creditors having the same anterest and in no conflict with each other. In Re Forbes White J. of the Court of Insolvency of South Australia decided that separate meetings of creditors under Part X of the Bankruptcy Act should be held with respect to joint debtors who are not partners although those separate meetings may be held concurrently. Re Forbes was decided in 1974 before s.187A was added to The Bankruptcy Act in 1980. This section is as follows - "187A (1) The provisions of this Part apply, subject to such modifications and adaptations (1f any) as are prescribed by the rules, in relation to joint debtors, whether partners or not. (2) In sub-section ({1), 'modification' includes the addition or omission of a provision or the substitution of a provision for another provision." Re Forbes is in any event distinguishable because the joint debtors in that case were not partners and the judgment suggests that the result might have been different if they had been. Section 188 gives leave to "a debtor" to sign an authority authorising a registered trustee to call a meeting of creditors. Pursuant to s.23(b) of the Acts Interpretation Act 1901-1984 "debtor" may be read as "debtors" unless the contrary intention appears. It seems to me that rather than a contrary intention appearing there 1s a positive indication in s.187A that "debtor" in s.188 should be read as "debtors". If the provisions of Part X are to apply to joint debtors whether partners or not they must, I think, be able to sign a joint authority authorising a registered trustee to call a meeting of their joint creditors (see Rule 100E of the Bankruptcy Rules). Where there are joint and several debts one authority is adequate to place both the joint and separate estates of the debtors in the hands of the trustee (Re Davis ex parte Hammond (No. 1), (1970) A.L.R. 838). If, at the meeting called by the trustee, joint and separate creditors attend, and if there 1s a composition proposed, then it may be necessary for the chairman of the meeting to obtain the views of the various classes of creditors by sepatate ¢ resolution by each class, thus avoiding the difficulties and potential problems adverted to by White J. in Re Forbes. I do not find it necessary to decide this in the present case. The only creditors present at the meeting were joint creditors who passed unanimously the resolution set out above. In response to the resolution the debtors entered into the Deed dated 19 February 1985. It seems to me that the Deed itself and the procedures adopted prior to its being executed are in accordance with the provisions of The Bankruptcy Act and I therefore declare that the Deed of Assignment executed by the debtors on the 19th day of February 1985 is not void. . pages cro au f tho Judgment of Mr. Jusice Forcier.