*" and for eben sthirhve Wa, o * 63k" IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISTON - QLD P654 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND ~ ~ RE: FRITZ HEINRICH MADER EX PARTE: LLOYD EDWARD HENDERSON MINUTES OF ORDER JUDGE MAKSNG ORDER: PINCUS @. DATE OF ORDER: 9 OCTOBER 1986 WHERS MADE: BRISBANE THE COURT OPDERS THAT: 1. I find the act of bankruptcy alleqed in the petition. I am satisfied of the proof of the other matters of which the Act requires proof. bo 3. I make a sequestration order in respect of the estate of the debtor. rs The costs of the petitioning creditor of and incidental to the proceedings, including reserved costs, be taxed and vaid in accordance with the Act. NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. "s IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISTON BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND ww QLD P654 of 1986 ~ ~ RE: FRITZ HEINRICH MADER EX PARTE: LLOYD EDWARD HENDERSON PINCUS J. 9 OCTOBER 1986 EX TEMPORE REASONS FOR JUDGMENT This is a petition for a sequestration order by Mr. L.E&. Henderson, alleqing that he lent the dehtor the sum of $20,900 in May 1985. I dealt at the hearing with what might be described as procedural aspects of the matter, but reserved my decision because I was uncertain as to 1ts substantive aspects. The petition alleges the commission of an act of bankruptcy, namely the giving of notice to creditors that the debtor has suspended, or was about to suspend payment of his debts. I am satisfied that he gave such notice, A more difficult question, however, which is discussed in an interlocutory judgment given on 17 July 1986, 1s whether or not the petitioner is a creditor. The matter depends, in essence, upon the effect to be given to a document, being annexure "A" to an affidavit of the petitioner filed on 20 June 1986, which is 2. headed "Redchamp Research Station Limited", and purports to be executed under the seal of that company. The point taken is that, on the face of it, the document does not create a relationship of debtor and creditor between the petitioner and Mr. Mader, but one between the company and Mr. Henderson. The matter was briefly discussed in the judgment referred to above at ».3, in which I said that a similar problem was discussed inan unreported decision of Connolly gd. in the Supreme Court of Queensland, delivered on 19 March 1986 in Sunbird Plaza Provrietary Limited v. Maloney. It was argued before me that, if the principle there adopted 1s correctly stated, its application is confined to guarantees. That seems to me unlikely. The law's traditional tenderness towards guarantors would seem ta be inconsistent with a rule making guarantors liable in a Situation in which principal debtors would not de. In my view, on the authority of the Sunbird Plaza case and the decisions there relied on, the execution just described 1s enough to make the signatory liable for the debt 1f, cf course, that was the true agreement. I understand that the decision in the Sunbird Plaza case has gone on appeal to the Full Court of the Supreme Court, but that no decision has been handed down by that court. Having again looked at the decision of Connolly J., I have come to the view that the signature here is sufficient to make Mr. Mader personally liable, but a more difficult problem is whether or not the true agreement was that he should be personally liable. It was argued by Mr. Dutney, on behalf of the petitioner, that that depends principally, if not wholly, upon the terms of the document annexure "A" which are as follows: "I, Fritz Heinrich Mader hereby acknowledge the personal loan of $20,000 from Lloyd Edward Henderson as of the 28th May 1985. The full amount of $20,000 to be repaid in full, plus all interest and other charges incurred by LLOYD EDWARD HENDERSON in arranging this loan on my behalf, within 30 days from this date. Until this debt 1s cleared, I agree to pay LLOYD EDWARD HENDERSON a consulting fee of $1000 per week, from REDCHAMP RESEARCH STATION LIMITED. I also agree to refund in full within 60 days from this date all other outstanding monies owing to LLOYD EDWARD HENDERSON for travel, accommodation and other expenses incurred by nim and myself on behalf of BANGALOW FARM MANAGEMENT PTY. LTD. matters to date." The first two sentences of the documents seem unequivocally to point towards personal liability un Mr. Mader. Of course, the expression "personal loan" is a strong indication in that direction. A more troubling provision is the third sentence, which can be argued to confine the liability which Mr. Mader undertakes to discharge to payment from the company; that 1S, 1t 18 possible that the true intention of the parties was that the company alone could be resorted to for payment. Certainly, the ideas expressed 1n the documents are a little confused. I have looked at authorities which seem to me likely to provide some solution to the problem, but have found none, not surprisingly, which is close enough to these facts to be of assistance. The question seems to me one purely of construction of the particular document. Without any complete confidence that the construction which I favoured when I wrote my reasons on 17 July 1986 1s correct, I have decided that I should adhere to that provisional view and construe the document, despite its heading and mode of execution, and the third sentence, as intended to make Mr. Mader personally liable. Iam therefore satisfied that the debtor-creditor relationship alleged exists, as contended by Mr. Dutney. As I have said, the other formal matters have already been disposed of at the hearing, and I propose to make a sequestration order. I find the act of bankruptcy alleged in the petition. I am satisfied of the proof of the other matters of which the Act requires proof. I make a sequestration order in respect of the estate of the debtor and order that the costs of the petitioning creditor of and incidental to the proceedings, including reserved costs, be taxed and paid in accordance with the Act. t certify that this and the 3 preceding pres are a (rie copy cf the :2asons fer posreent he.ein of His Honour A h v Cit soos er~oD J Associate Dated 9 Gcleler 1966 Mr Justice Pincus