URBACH AND ANOTHER V. WALKER BROTHERS (AUSTRALIA) PROPRIETARY LIMITED

This is an apygeal from a sequestration order sade by the *ederal Court of Gankruptey in resyeet of the estate of each of the ajpellants. The aet of bankruptey upon which the ,etition was founded was alleged, substantially, in the foliowing terus: that the @ppellants had, within six aconths before the y,resentation of the petition, assigned their estates to a trustee pursuant to a deed of arrangement sade under Part XII of the Bankruptey Act 1324-1950 sade for the benefit of their ereditors generally, which deed was filed and registered on l?th ipril 1964,

The petition was oppesed on the ground that the deed was in full foree and effect and that, although the respondents had not assented to the deed in the aanner provided by sec. 195(2) of the Act, it had lodged a proof of debt with the trustee and was, therefore, precluded from relying upon the execution of the deed as an set of bankruptcy.

The Bankruptcy Court disposed of these objections on two grounds. It was held, first of all, that the deed was not in accordance with Part XII of the Aet and, secondly, that the deed was void, as it sppeared that it had not received the assent of a majority in value @f the eveditors within the prescribed tine.

The evidence on the latter point is, in many reapects, quite ungatisfactory but it appears that 1% was eoneeéed at the hearing, as it was on this appeal,

2e

alleged in the petition - and aot awerely in tae sum of £9,392 + that is, the asount shown in the schedule to

the deed az the ancunt of their debt - the aijority in value of the creditors had not assented to the deed.

Thers ig, we txink, the clearest evidence that the anount of the res.ondent's debt was £15,399 and that a debt to this extent was acknowledged by both of the a.pelisnts. But because it was in ressect cf a liability contracted under a contract of guarantee the appellants, or pernups the trustes, thinking tnat the respondent aight recover some part of its outstanding moneys fram the »rincipal dedter, inserted a net amount in the deed after taxing tnis factor into account.