Re Corstorphan, B.D. v. Ex parte Marac Finance Australia Ltd [1988] FCA 146

Re Corstorphan, B.D. v. Ex parte Marac Finance Australia Ltd [1988] FCA 146

The deed of release was a formal release under seal, contained no express reservation of rights against Bruce David Corstorphan, and was unambiguous. Evidence of Marac Finance Australia Limited's subjective intention and internal records was inadmissible to alter its effect. The release of Gail Westhoff therefore discharged Bruce David Corstorphan's joint and several obligations. Section 82 of the Bankruptcy Act 1966 did not preserve a debt that had ceased to exist, and clause 13 of the equitable charge was only facilitative and did not itself reserve rights in the deed of release. The Official Receiver was correct to reject Marac Finance Australia Limited's proof of debt.

Jurisdiction
Australia
Judgment Date
05 February 1988
Procedural Posture
Bankruptcy Application Challenging Rejection of Proof of Debt / Extempore Reasons for Judgment
Outcome
Application dismissed.
Legal Topics
['proof of Debt' 'release of Joint and Several Debtors' 'parol Evidence Rule' 'construction of Deed of Release' 'equitable Charge']
['bankruptcy' 'contract Law'] ['proof of Debt' 'release of Joint and Several Debtors' 'parol Evidence Rule' 'construction of Deed of Release' 'equitable Charge']

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Procedural Posture

Bankruptcy Application Challenging Rejection of Proof of Debt / Extempore Reasons for Judgment

Legal Issues

  1. 1 ['Whether the deed of release granted by Marac Finance Australia Limited to Gail Westhoff released Bruce David Corstorphan from joint and several obligations to Marac Finance Australia Limited.' "Whether extrinsic evidence of Marac Finance Australia Limited's subjective intention and internal records was admissible to show that rights against Bruce David Corstorphan were preserved." 'Whether s.82 of the Bankruptcy Act 1966 made the liability provable notwithstanding the later deed of release.' "Whether clause 13 of the equitable charge preserved Marac Finance Australia Limited's rights against Bruce David Corstorphan following the deed of release."]

Ratio Decidendi

The deed of release was a formal release under seal, contained no express reservation of rights against Bruce David Corstorphan, and was unambiguous. Evidence of Marac Finance Australia Limited's subjective intention and internal records was inadmissible to alter its effect. The release of Gail Westhoff therefore discharged Bruce David Corstorphan's joint and several obligations. Section 82 of the Bankruptcy Act 1966 did not preserve a debt that had ceased to exist, and clause 13 of the equitable charge was only facilitative and did not itself reserve rights in the deed of release. The Official Receiver was correct to reject Marac Finance Australia Limited's proof of debt.

Court Disposition

Application dismissed.

Orders

  • ['The application is dismissed.']