Re Feltham, Paul Richard (Judgment Debtor) Ex Parte Double Bay Newspapers Pty Ltd & Ors [1996] FCA 451

Re Feltham, Paul Richard (Judgment Debtor) Ex Parte Double Bay Newspapers Pty Ltd & Ors [1996] FCA 451

Although the Court had power to permit amendment and to make a summary sequestration order, it should not do so because the defect leading to annulment was procedural, a fresh creditors' meeting had been convened to consider a modified scheme, the request for summary sequestration was made very late and had not been considered at the earlier hearing, and refusal would not deprive the creditors of the ability to pursue the usual petition procedure based on any available act of bankruptcy.

Jurisdiction
Australia
Judgment Date
06 June 1996
Procedural Posture
Bankruptcy Application Concerning Annulment of a Scheme of Arrangement and Proposed Summary Sequestration / Reasons for Judgment and Orders on Annulment Application and Late Application to Amend to Seek Sequestration
Outcome
Scheme of Arrangement annulled; creditors awarded costs of the annulment application; application to amend to add sequestration refused; no order as to costs of the summary sequestration hearings.
Legal Topics
['scheme of Arrangement' 'deed of Arrangement' 'annulment' 'summary Sequestration Order' 'amendment of Application' 'acts of Bankruptcy' "creditors' Meeting"]
['bankruptcy and Insolvency'] ['scheme of Arrangement' 'deed of Arrangement' 'annulment' 'summary Sequestration Order' 'amendment of Application' 'acts of Bankruptcy' "creditors' Meeting"]

Case Brief

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Procedural Posture

Bankruptcy Application Concerning Annulment of a Scheme of Arrangement and Proposed Summary Sequestration / Reasons for Judgment and Orders on Annulment Application and Late Application to Amend to Seek Sequestration

Legal Issues

  1. 1 ["Whether the Scheme of Arrangement accepted on 21 April 1995 should be annulled because the creditors' meeting had not been properly convened." 'Whether the creditors should be permitted at a late stage to amend the 1995 application to add an application for a sequestration order.' 'Whether the Court should exercise its discretion under s222(7) of the Bankruptcy Act 1966 (Cth) to make a summary sequestration order.' 'Whether the creditors should be deprived of the opportunity to consider and vote on a modified scheme at a freshly convened meeting.']

Ratio Decidendi

Although the Court had power to permit amendment and to make a summary sequestration order, it should not do so because the defect leading to annulment was procedural, a fresh creditors' meeting had been convened to consider a modified scheme, the request for summary sequestration was made very late and had not been considered at the earlier hearing, and refusal would not deprive the creditors of the ability to pursue the usual petition procedure based on any available act of bankruptcy.

Court Disposition

Scheme of Arrangement annulled; creditors awarded costs of the annulment application; application to amend to add sequestration refused; no order as to costs of the summary sequestration hearings.

Orders

  • ['The Scheme of Arrangement accepted on 21 April 1995 be annulled.' "The creditors' costs of the annulment application be paid by the debtor." 'The application for amendment of the 1995 application, by addition of an application for sequestration, be refused.' 'No order as to the costs of the hearing on 4 June 1996...