Heuir, Kenneth Russell & Anor; Ex Parte Bendeich, Graham Ross [1998] FCA 641

Heuir, Kenneth Russell & Anor; Ex Parte Bendeich, Graham Ross [1998] FCA 641

The Deed should not be terminated because it could be carried into final effect, the debtors had done what was required of them under the Deed, there was no proven misrepresentation or misconduct, and the creditors' disappointed expectation of a 100 cents in the dollar dividend did not establish a ground under s 236(1)(b) or (c). The creditors made a commercial judgment on material that expressly warned the appraisal was not a valuation, and termination with sequestration would likely further reduce funds available to unsecured creditors rather than serve their interests or the public interest.

Jurisdiction
Australia
Judgment Date
10 June 1998
Procedural Posture
Bankruptcy Application to Terminate or Set Aside Deed of Arrangement and for Sequestration Orders / Application Heard and Dismissed
Outcome
Application dismissed.
Legal Topics
['deed of Arrangement' 'termination of Deed of Arrangement' 'sequestration Orders' 'exercise of Discretion Under S 236 of the Bankruptcy Act 1966 (cth)' "creditors' Expectations and Asset Valuation"]
['bankruptcy'] ['deed of Arrangement' 'termination of Deed of Arrangement' 'sequestration Orders' 'exercise of Discretion Under S 236 of the Bankruptcy Act 1966 (cth)' "creditors' Expectations and Asset Valuation"]

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Procedural Posture

Bankruptcy Application to Terminate or Set Aside Deed of Arrangement and for Sequestration Orders / Application Heard and Dismissed

Legal Issues

  1. 1 ['Whether the Deed of Arrangement should be terminated under s 236(1) of the Bankruptcy Act 1966 (Cth).' "Whether the failure of realised asset values to meet creditors' expectations made it appropriate to terminate the Deed and make sequestration orders." 'Whether there had been any misrepresentation as to the value of the 21st Avenue, Mount Isa property before creditors voted for the Deed.' 'Whether termination and sequestration would be in the interests of creditors, debtors and the public.']

Ratio Decidendi

The Deed should not be terminated because it could be carried into final effect, the debtors had done what was required of them under the Deed, there was no proven misrepresentation or misconduct, and the creditors' disappointed expectation of a 100 cents in the dollar dividend did not establish a ground under s 236(1)(b) or (c). The creditors made a commercial judgment on material that expressly warned the appraisal was not a valuation, and termination with sequestration would likely further reduce funds available to unsecured creditors rather than serve their interests or the public interest.

Court Disposition

Application dismissed.

Orders

  • ['The application is dismissed.']