Re Shergold, P. v. Ex parte McInnes, T.G. & P.M. [1986] FCA 387

Re Shergold, P. v. Ex parte McInnes, T.G. & P.M. [1986] FCA 387

There was no valid 'meeting' of creditors within the meaning of the Bankruptcy Act 1966 where only one person (the controlling trustee) attended holding proxies for several creditors; at least two persons must be present for a meeting to be valid. Consequently, the deed of arrangement entered into as a result of such a purported meeting was void and of no effect.

Parties
Debtor: Paul Shergold; Debtor: Judy Shergold; Petitioning Creditor: Thomas Gerald McInnes; Petitioning Creditor: Pauline Maria McInnes; Controlling Trustee: Mr. Gagie
Jurisdiction
Australia
Judgment Date
03 September 1986
Procedural Posture
Bankruptcy Application / Application to Set Aside Deed of Arrangement
Outcome
Deed of arrangement set aside.
Legal Topics
Deed of Arrangement, Meeting of Creditors, Quorum, Proxies, Statutory Construction
Bankruptcy Deed of Arrangement Meeting of Creditors Quorum Proxies Statutory Construction

Case Brief

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Parties

Paul Shergold

Debtor

Judy Shergold

Debtor

Thomas Gerald McInnes

Petitioning Creditor

Pauline Maria McInnes

Petitioning Creditor

Mr. Gagie

Controlling Trustee

Procedural Posture

Bankruptcy Application / Application to Set Aside Deed of Arrangement

Legal Issues

  1. 1 Whether a meeting of creditors is valid if only one person (the controlling trustee) is present holding proxies for more than one creditor.
  2. 2 Whether the deed of arrangement entered into as a result of such a meeting is valid.

Ratio Decidendi

There was no valid 'meeting' of creditors within the meaning of the Bankruptcy Act 1966 where only one person (the controlling trustee) attended holding proxies for several creditors; at least two persons must be present for a meeting to be valid. Consequently, the deed of arrangement entered into as a result of such a purported meeting was void and of no effect.

Court Disposition

Deed of arrangement set aside.

Orders

  • The Deed of Arrangement entered into by the debtors on 30 May 1986 be set aside.