Hyde, Anthony Neville v Kiely, Noel Rodney & Anor [1998] FCA 608

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 7936 of 1997

In the matter of : noel rodney kiely

BETWEEN: ANTHONY NEVILLE HYDE

Applicant

AND: NOEL RODNEY KIELY

First Respondent

JOSEPH LOEBENSTEIN

Second Respondent

JUDGE: LINDGREN J

DATE: 28 MAY 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT (ex tempore) INTRODUCTION The applicant creditor ("Mr Hyde') seeks the following substantive orders by his application filed on 6 August 1997: "1. An order that the Deed of Composition dated June or July 1997 between Noel Ronald Kiely as debtor and Joseph Loebenstein as trustee ('the Deed') is void. 2. In the alternative, an order prohibiting Noel Ronald Kiely as debtor and Joseph Loebenstein as trustee from entering into a Deed of Composition. 3. Further or in the alternative, an Order terminating the Deed. 4. A sequestration order against the Estate of Noel Ronald Kiely." In fact there is no "deed" of composition, but rather an acceptance of a composition proposed by the first respondent debtor ("Mr Kiely"). I granted leave to Mr Hyde to amend the application by filing an amended form of application, omitting the words "deed of" in pars 1 and 2 and the material "(the Deed)" in par 1 and substituting the word "composition" for the word "deed" in par 3. The second respondent ("Mr Loebenstein"), who is the trustee of the composition, did not appear. His solicitors wrote to the Registry on 18 February 1998 advising that their client neither consented to nor opposed the making of the orders. They advised that Mr Loebenstein would abide by any order of the Court except an order as to costs. Mr Hyde does not seek an order for costs against Mr Loebenstein. On the hearing today Mr S Bell of counsel has appeared for Mr Hyde, while Mr Kiely has appeared in person. RELEVANT LEGISLATIVE PROVISIONS AND RULES The relevant provisions of the Bankruptcy Act 1966 ("the Act") are sections 204, 222 and 242. As is well known, s 204 provides for, inter alia, the passing of a special resolution at a meeting of creditors called pursuant to an authority under s 188, accepting a composition proposed by a debtor. Subsections 222(4),(5) and (7) are as follows: "222(4) Where the Court, on the application of the Inspector-General, the trustee or a creditor, is satisfied that the debtor: (a) has given false or misleading information in answer to a question put to him or her with respect to any of his or her conduct or examinable affairs at the meeting of creditors at which the resolution requiring him or her to execute the deed or accepting the composition was passed; or (b) has omitted a material particular from the statement of the debtor's affairs given under subsection 188(2) or included an incorrect and material particular in that statement; the Court may make an order declaring the deed or composition to be void or declaring any provision of the deed or composition to be void. (5) The Court shall not make an order declaring a deed or composition, or a provision of a deed or composition, to be void on a ground specified in subsection (4) unless it is satisfied that it would be in the interests of the creditors to do so. ....