a 4 SQS IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND "Gir tthe MOU Be feelp! rod QLD Part X 224 of 1986 RE: DAVID STEWART CREW EX PARTE: AUSTRALIAN GUARANTEE CORPORATION LIMITED DATE, OF HEARING: DATE JUDGMENT DELIVERED: COUNSEL : » for the applicant for Ampol Petroleum (Qld.) Pty. Ltd. 30 OCTOBER 1986 30 OCTOBER 1986 Mr. D.C. Andrews instructed by Feez Ruthning & Co. Mr. K. Philp of Davies Philp Mullican Jd. A. LYONS ASSOCIATE TO PINCUS J. 30 OCTOBER 1986 W-—- CATCHWORDS BANKRUPTCY - resolution that deed of assignment be executed - omission to nominate trustee - application to Court to fill vacancy - large debts and very small assets - exercise of discretion. Bankruptcy Act, 1966 ss.187(1), 204(4), 220(2) Re: David Stewart Crew Ex parte: Australian Guarantee Corporation Limited Qld Part X 224/86 PINCUS J. BRISBANE 30 OCTOBER 1986 ees Lv fouctet. oooson ae Rss ey IN THE PEDERAL COURT OF AUSTRALIA GENERAL DIVISION - QLD Part X 224 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND ~ ~~ RE: DAVID STEWART CREW EX PARTE: AUSTRALIAN GUARANTEE CORPORATION LIMITED MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 30 OCTOBER 1986 WHERE MADE: BRISBANE THE COURT ORDERS THAT: The application be dismissed with costs fixed at $200. NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. Ree er men gee te ~ te Ve a! ear cer gr IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ~ QLD Part X 224 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: DAVID STEWART CREW EX PARTE: AUSTRALIAN GUARANTER CORPORATION LIMITED PINCUS J. 30 October 1986 EX TEMPORE REASONS F'OR JUDGMENT This is an application by Australian Guarantee Corporation Limited, a creditor of Mr. D.S. Crew, for an order that the court nominate Mr. R.A. Barber, a registered trustee, to be the trustee of a deed of assignment. Mr. Crew appointed Mr. Barber his controlling trustee under s.188 of the Act, and a meeting of creditors was consequently held, on 17 September last. At that meeting there was a motion by a Mr. Wiseman of Australian Guarantee Corporation Limited, the present applicant, that a solicitor, Mr. Buchanan, be elected to chair the meeting, and that was passed. Subsequently there was passed a motion that Mr. Crew execute a deed of assignment under Part X. The applicant, being owed a sum of $147,143.08, voted for the motion as did A.G.C. Finance Limited which was owed $1,926.79. Three other creditors who were represented voted against the motion, and since their debts totalled $81,525.06, it would have been lost but woccr we ee at owe . -a ay ap re ns eo re oe ee re ' - ta for the intervention of the chairman. He held three proxies totalling $136,668.61 in his own favour and voted for the motion. Thus it was passed. Nothing is placed before me to throw any doubt upon the validity of the vote, but it should be noticed that those in favour of the motion at the meeting were the applicant, an associated company, and amember of the applicant's firm of solicitors who "advised that he was acting independently of the creditors for whom he was nominated their proxy." Under s.204(4) of the Act, where a special resolution requiring the debtor to execute adeed of assignment has been passed: "Che creditor shall by resolution nominate a registered trustee or registered trustees to be the trustee or trustees of the deed." That did not occur, and the purpose of the present application is to remedy the deficiency. Mr. Andrews, on behalf of the applicant creditor, has drawn my attention to a number of provisions of the Act under which that might possibly be done, and has helpfully pointed out the difficulties attaching to each. His principal submission appears to be that the court should treat the absence of a trustee as a vacancy within the meaning of s.220(2), which vacancy might be filled under that provision. Mr. Philp, solicitor, has appeared for Ampol Petroleum Limited, a creditor, and expressed opposition and asked for an Ss rt oe wer eee 8 Solllioant talentetarndgineeeaeatet mente . . a rr a 2 SN er et eee oe r+ rn ns adjournment. According to the statement of affairs the only asset available for the creditors appears to be the sum of $370 cash. The creditors are said to total §573,500. So that the assets caught by an assignment would be less than one-tenth of 1 per cent in value of the total of the debts. If a deed were executed the question might arise whether the transaction was one "for the benefit of creditors" within the meaning of the statute. See the definition of "deed of assignment" in s.187(1) of the Act; and Re Beames; Ex parte Beneficial Finance Corporation Limited (1985) 7 F.C.R. 216 at p.227. The proposed deed would certainly not be within the spirit of the provisions relating to deeds of assignment. Here the application seeks to have the Court's discretion exercised in favour of perfecting the resolution referred to above. The purpose of the resolution was, in a practical sense, not to benefit creditors but to benefit the debtor. In my opinion, the Court should not, in general, lend its aid in such circumstances, but should leave the creditors who wish to assist the debtor to their own devices. To do otherwise would in my opinion be unfair to that significant minority (22 per cent in value) of the creditors who opposed the motion. The application will be dismissed. In this matter, the resisting creditor Ampol has been successful and should, in my view, receive costs. However, in the circumstances, I think the costs should be limited and fixed, for [dle ied TT two reasons. One is because of the difficulty, to which attention has been drawn of dissecting out costs relating to a foreshadowed application to attack what has been done, from the costs of resisting today's application. The second reason is that I think I should take into account the fact that no doubt, without fault in the ordinary sense, it was Mr. Hulse who suggested the course which has turned out to be legally ineffective. Therefore, the order will be that the application be dismissed, with costs fixed at $200. cerufy that this andthe 3 preceding Panss are a true copy ot the reasons for jucament hore:n of His Honour Mr Just - pf ir Justice Pincus ple youn x Associate Dated 30 Gctefier LEA Ae et nt ner eo ee pro "4, > we epee Sere ts woe: