6d! | ys bore ns ae CATCHHOPDS Bankruptcy - deeds of assiaqnment entered into within period of 14 davs of signing of authorities under s. 188 of Bankruptcy Act 1966 - whether deeds void - in respect of further deed no distinction drawn (in voting at meeting at which resolution passed that debtor enter into deed) between ioint creditors and separate creditors - whether deed void. Bankruptcy Act 1966, ss. 188, 194. Bankruptcy Rules, rules 100C, 100F. RE_JOHN BRIAN CULLEN and ANOR, EX PARTE THE OFFICIAL TRUSTEE IN BANKRUPTCY No. W13X of 1983 Coram: Sheppard J. Date : 3 December 1985 Place: Sydney i a a ee ee ree ree IN_THE FEDERAL COURT OF AUSTPALTA NEW SOUTH WALES DISTPICT REGISTRY GENERAL DIVISTON BANKRUPTCY DISTRICT OF THE STATE OF NEW SOMNTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY ' ) 8) ) ) ) ) ) \ \ ) RE: JOHN BRIAN CULLEN and ANOR. No. W12X of 1983 EX PARTE: THE OFFICIAL TRUSTEE IN BANKRUPTCY MINUTES OF ORDER JUDGE MAKING ORDER: Sheppard J. DATE OF ORDER : 3 December 1985 WHERE MADE : Sydnev THE COURT ORDERS THAT: - Declarations be made that: L 3. The deed of assignment entered into by John Brian Cullen, Annie Jean Cullen and John Ramsay Paul Partridae on 10 November 1982 pursuant to a resolution passed at a meeting of creditors of the debtors held on 10 November 1982 is invalid. 2. The deed of assignment entered into by John Brian Cullen on 10 November 1982 and John Ramsay Paul Partridae on 23 November 1982. pursuant to a resolution passed at the said meeting of creditors is invalid. The deed of assignment signed by Annie Jean Cullen and John Ramsay Paul Partridae in November 1982 pursuant to a NOTE: Settlement and entrv of orders is resolution passed at the of the Bankruptcy Rules. said meeting dealt with in Fule 174 Ls invalid. wee TU THE FEDEPAL COUPT OF AUSTRALIA NEW SOUTH WALES DISTPICT PEGISTFY BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES ) ) ) s) GENERAL DIVISTON ) No. W1L2% of 1983 ) ) } ' AND THE AUSTRALIAN CAPITAL TERRITORY RE: JOHN BRIAN CULLEN and ANOR. Ex PARTE: THE OFFICIAL TRUSTEE IN BANKRUPTCY CORAM: SHEPPARD J. DATE : 3 DECEMBER 19985 REASONS FOR JUDGMENT HIS HONOUR: The application in this matter raises for determination the question of whether or not certain deeds of assianment entered into bv Mr. and Mrs. Cullen separately and Mr. and Mrs. Cullen fiointly, with Mr. J.R.P. Partridae as trustee are valid. Authorities were executed by the debtors pursuant to s. 188 of the Bankruptcv Act 1966. The authoritv sianed by Mr. J.B. Cullen was sianed by him on 2 October 1982. The authority sianed by Mrs. A.J. Cullen was sianed by her on 28 October 1982. The authority siqned by the two debtors in respect of their joint estate was sianed by them on 10 November 1982. A meeting of creditors was called on 29 October 1982. [It was bd resolved that the meeting of creditors be adtourned until 19 November 1982 and that creditors be notified. A further meeting was held on 10 November 1982. At that meeting it was resolved that the debtors jointly and separatelv execute deeds of assianment under Part X of the Act, Section 194 of the Act provides that the meeting of creditors to be called in pursuance of an authority under s. 188 shall be held not later than 28 davs after the authoritv 1s sianed by the debtor (except in the case of an authoritv sianed in Decemher. for which special provision is made) and not earlier than 14 davs after the notices to creditors are delivered or sent bv post nder sub-sec. (2), Sub-section 194(4) provides that a fa1rlure to comply with sub-secs.(2) or (3) of the section shall not render a meeting incompetent to act for the purposes of the Part. that is to sav Part X of the Act. Sub-sections (2) and (3) are not relevant for present purposes. No provision is made in the section as to what is to be the consequence of failure to comply with sub-sec. (1). which 1s the relevant provision here. In those circumstances. particularly bearina in mind the important matters with which sub-sec. (1) deals. I am of the opinion that failure to comply with sub-sec. (1) renders anv meetina called invalid. There is no evidence, at least no direct evidence. of when notices were sent. But the authorities which were sianed bv Mrs. 2 Cullen and by Mr. and Mrs. Cullen iointly were sianed within a period of 14 davs prior ta the meeting held on 10 November 1982. Furthermore. at the time of the meeting. which was held on 29 October 1982, there was no authoritv from the debtors jointly and the authority from Mrs. Cullen was onlv one dav old. There was no authoritv to aive notice toa anv creditor until an authoritv under s. 188 had been siaqned. It must follow. as a consequence. that the provisions of s. 194 were not complied with in relation to Mrs. Cullen and in relation to Mr. and Mrs. Cullen so far as their joint estate 1s concerned. In my opinion the deeds of assionment executed bv them as a result of the resolutions passed at the meeting are invalid. The same problem does not applv in relation to the deed executed by Mr. Cullen because the authoritv he sianed was dated 2 October 1982. But it would appear from the minutes of the meeting of 10 November that there was no distinction drawn at the meeting between creditors of the separate estates of the two debtors and creditors of their jtoint estate. Mv attention was drawn to rule 100C of the Bankruptcv Rules. which is in Part IXA thereof. The Part is divided into two Divisions. one entitled "Division 1 - Joint Bankruptcies" and the other "Division 2 - Joint Arrangements under Part X" (of the Act). Rule 100C is in Division 1. It provides that at a meeting ef foint and separate creditors, separate creditors shall not 4, vote oan a cesolution proposed for consideration bv taint eveditors and foint creditors shall not vote on a resolution proposed for consideration bv separate creditors. Rule 1OOF is in Division 2. It provides that the provisions of Division 1 with respect to the holding and conduct of a meeting held pursuant to s. 44 of the Act applv. so far as thev are applicable. to the holding and conduct of a meeting held pursuant fo s. 188 of the Act. Rule 100C therefore applied to the circtmstances of the present case. There having been at the meeting no distinction drawn between which creditors were voting in respect of which of the three estates which the meeting had to deal with, it seems to me that the meeting acting in that wav was not empowered to resolve that Mr. Cullen. qua his separate estate. enter into adeed of assianment. For that reason the deed of assignment which he entered into was ivalid. For the reasons I have given I am of the view that the three deeds of assianment are invalid. and accordinalv I declare that the deed of assianment entered into by John Brian Cullen, Annie Jean Cullen and John Ramsav Paul Partridge on 10 November 1982 pursuant to a resolution passed at a meetina of creditors of the debtors held on 10 November 1982 is invalid. I further declare that the deed of assianment entered into bv John Brian Cullen on 10 November 1982 and John Ramsav Paul Partridae on 23 November 1982. pursuant to a resolution passed at the said meeting of i o Tee The ereditore ts invalid and tf also declare that a deed of aggianment Siomed bv annie Jean Cullen and John Ramsay Paul Partridge in November 1992, Pursuant to q resolution passed at the said meeting is invalid. i receding tcertrly that this and the oy p ns for ages are a true copy of the ress i 'i ment herein of The Honourable judg Mr Justice Sheppard. / Athan Assaciate Dated 3 DECES7 SEAR 1985