, ' Ne a JUDGMENT No. 244 7..33_. No. P.1028 of 1987 ia eer IN_BANKRUPICY .4 'A OF VICTORI Re: CROWLEY CRENNAN A Debtor and Ex Parte: Tv Cc ~L_ AND OTHERS Petitioning Creditors COURT: NORTHROP J. DATE : 16 MARCH 1988 PLACE: | MELBOURNE EX TEMPORE REASONS FOR JUDGMENT This is the return of a petition for a sequestration order aginst the debtor, Crowley Crennan. The petition is based upon an act of bankruptcy arising from the failure to comply with a bankruptcy notice issued pursuant to a judgment debt obtained by the 15 petitioning creditors against three defendants, including the debtor, Crennan. The petition was signed by three only of the 15 judgment creditors. The debtor has taken a number of grounds of objection to the making of the sequestration order. One of those objections only has been argued before me at present - namely, that the petition is invalid because it has not been signed by all the judgment creditors. This objection is 2. based upon the requirements of the Bankruptcy Act and the form of the petition, namely that the petition must be signed by the creditors, and the authority of the High Court in Australian Workers' Union v Bowen (1946) 72 C.L.R. 575. That authority states that if there are two or more creditors each creditor must sign the petition in conformity with the rules and the form of petition in the Act unless there is authorisation by all creditors to one person, or more' than one person, to sign the petition on behalf of all the creditors. In the present case the petition was signed by three of the creditors under the following notation: "SIGNED by the Management Committee of the Petitioner who were authorised to act on behalf of the Petitioner namely GEOFFREY COHEN, QUENTIN WILLIAM VAUGHAN WALLACE and PETER TREWIN by authority granted pursuant to Paragraph 12 of a Partnership Deed executed the 3rd June 15980 by all the members of the partnership called "Corporate Jet Charter" of which partnership all the Petitioning Creditors are members." There is some inelegance of language of that notation in that the petition itself names 15 persons as petitioners and names 15 persons as judgment creditors, but refers to the management committee of the petitioner - singular - who were authorised to act on behalf of the petitioner - singular - pursuant to the authority granted by paragraph 12 of a partnership deed. There is before the Court a deed of partnership 3. which is undated but said to be entered into in the year 1985. There are 18 persons said to be parties to that deed of partnership, 15 of whom are the present petitioners, one ef whom is the judgment debtor and the other two being the other judgment debtors to the judgment of the Supreme Court on which this petition is founded. The recitals to that agreement state that the parties have agreed to lease the aircraft described in item (b) of the schedule hereto, and: "B. The parties have agreed to enter into partnership as partners in the business of using the said aircraft for flights as operators for reward throughout Australia and elsewhere." Clause 12 of the Agreement provides as follows: ""(i) Unless otherwise determined by the partners all decisions affecting the partnership business shall be made by the partners in partners' meetings but the Partners may engage a manager to conduct the day to day administration of the Partnership business and may entrust Management and supervision of the partnership business to a management committee. (ii) The management committee shall consist of three persons of whom two shall be members of the partnership and shall have the powers and duties committed to it in writing by the Partners in general meeting." There is evidence before the Court that the three persons who signed the petition on behalf of the petitioner are the members of the management committee, appointed Pursuant to clause 12 of the partnership agreement. There is also before the Court minutes of a meeting of partners held on 19 September 1985 at which it was resolved: "That the Management Committee be authorised to approve expenditure up to $6,000 in respect of bankruptcy proceedings against Messrs. Crennan, Lupton and Huttley." It should be noted that the Mr Crennan referred to in that resolution is the debtor named in this petition. It is obvious from the judgment debt on which the bankruptcy notice is founded that the 15 plaintiffs are suing in their own names. There is nothing to show that they are suing as a partnership. There is nothing to show the basis for the claim and judgment against the three defendants. But it appears from what has been said from the bar table and from the partnership agreement that, in so far as Crennan is concerned, the claim is for moneys owing to the 15 plaintiffs pursuant to the partnership agreement by which he agreed to contribute certain moneys to the partnership for the purposes of the business of the partnership. In these circumstances it is argued that there could be no reliance upon clause 12 of the partnership agreement and of the actions taken by the committee appointed pursuant to clause 12 because what was being sued for and what was the basis for the judgment debt was not part of the partnership business but was in the nature of a private right arising from the partnership agreements as between the partners themselves. It was contended, quite correctly in my opinion, that it would not be permissible for the partnership to sue one member of the partnership for a debt because that would 5. mean that the one member sued would be on both sides of the record in the court proceedings - something which would not be permitted. It follows, in my opinion, that the judgment debt obtained here was a debt owed jointly to all the creditors so that if the amount was paid to one, that would be a sufficient discharge for all the others; that it was not a claim based upon the partnership business itself but was a claim by individual members of the partnership in their private capacity against the defendants, including Crennan, based upon contract. In these circumstances I have formed the view that clause 12 is not appropriate to authorise the members of the committee to sign the petition or to take proceedings for the bankruptcy of the debtor. The terms of clause 12 cannot authorise them to sign the petition on behalf of all the creditors. Those creditors, as individuals, have not authorised those three to sign the petition. In any event, the view I take of the resolution, which I quoted before, does not authorise the members of the committee to sign a bankruptcy petition. It is merely a resolution authorising the expenditure of money in respect of bankruptcy proceedings and is not sufficient in itself to authorise the three persons concerned to sign a petition on behalf of the 15 judgment creditors. For these reasons, it is my opinion that the petition has not been signed by the petitioning creditors; it does not comply with the requirements of the Act and of the rules and therefore the petition ought to be dismissed. In these circumstances I do not find it necessary to consider 6. any of the other grounds of opposition to the making of petition. In the result, the following orders are made: (1) the petition be dismissed; (2) the petitioning creditors to pay the judgment debtors' costs of and incidental costs paid to the petition, including reserved, to be taxed and accordingly. I certify that this snd ste five (s) preceding pages are a iri: copy of the Reasons for Judgment hervir +i the Honourable Mr. Juste RM North) Sharm P LADUE" Aveorinte Dated: [6 Mart (988 em Dan the