Re Lawrence, G.C. & Anor v. Ex parte Burns, R.J. F. & Anor [1985] FCA 469

Federal Court of Australia|1985-09-19|Before: Beaumont J, Gibbs JJ, Pincus J

BANKRUPTCY - deed of assignment - Part X - witness an assignee - whether effective to assign - whether must be treated as valid

until declared void - extension of time for attestation of deed -

ESTOPPEL - judgment in rem - what is ~ binding quality - whether

RE: GEOFFREY CHARLES LAWRENCE and DESMA FLORENCE LAWRENCE EX PARTE: ROBERT JOHN FRED BURNS and PETER IVAN FELIX GEROFF

BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND )

RE: GEOFFREY CHARLES LAWRENCE and DESMA FLORENCE LAWRENCE

EX PARTE: ROPRERT JOHN FRED BURNS and PETER IVAN FELIX GEROFF

JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 19 SEPTEMBER 1985 WHERE MADE: BRISBANE

The time for attestation of the deed of assignment executed by the applicants and by the debtors on 8 October 1984 be extended to 10 October 1985.

NOTE: Settlement and entry of orders 15 deait with in Order 36

IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) NQ PART X 11 of 1984

BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QURENSLAND )

RE: GEOFFREY CHARLES LAWRENCE and DESMA FLORENCE LAWRENCE

EX PARTE: ROBERT JOHN FRED BURNS and PETER IVAN FELIX GEROFF

This application is by two trustees registered under the

Bankruptcv Act, seeking relief against the consequences of a

On 8 October 1984 the debtors, G.C. and D.F. Lawrence, signed a deed of assignment under Part X. The applicants were the assignees and they acted under the deed. One thing they did was to bring proceedings against a company named Lorac Mining Pty Limited about title to an aircraft. That application came on before Beaumont Jd. but his Honour dismissed it on the ground that the deed was ineffective. That was so, his Honour said, because

the signatures of the debtors were witnessed by one of the

Before me the applicants apply for a declaration that the deed is not void or for an order extending time to allow the deed now to be witnessed. It is said that a lady who observed

the execution of the deed may now be able to attest it properly.

The declaration sought is based on the view that Beaumont J. was wrong. The questions involved may therefore be

First Question: The decision of Beaumont J. is, prima facie, binding only as between the applicants and Lorac Mining Pty Limited, and persons claiming through them. Mr D.J.S.

Jackson, who appears for the applicants, says it is not binding

otherwise, and that he is entitled to challenge it.

A judgment in rem is one determining the status of a person or thing, or the disposition of a thing, as distinct from the particular interest in it of a party to the litigation:

Halsbury 4th ed. vol. 16 par, 1522. It is characteristic of a

judgment in rem that it binds all the world: ibid par. 1537.

However, the judgment of Beaumont J. is not conclusive as against all the world, as to the status of the applicants. His Honour simply dismissed their application and made consequential orders. A judgment in rem is conclusive only as to the point adjudicated upon, which 1s the status of the res:

Coles-Smith v. Smith (1965) Od. R. 494 at p.506 per Stable and

Gibbs JJ. It is not easy to find examples of judgments held to be binding in rem as to anything other than the immediate effect of the judgment itself, as opposed to the reasons or findings; some are mentioned in the footnotes to Halsbury 4th ed. vol. 16 par. 1538. Coles-Smith v. Smith (above) is more typical; it was there held that a divorce decree is not conclusive as to the

validity of the ground on which the decree was granted.

Here, the judgment did not itself sav anything about the status of the assignees and is therefore not binding in rem. In contrast, it appears that a declaration that a deed is void under

Two further points fall to be considered under this heading. The first 1s whether the doctrine of abuse of process, which has recently shown expansive tendencies, applies: see

Hunter v. Chief Constable of the West Midlands Police (1982) A.C.

It was there held that a decision on a voir dire ina

criminal case as to the voluntariness of confessions, coupled

with the jury's guilty verdict, prevented the accused from suing civilly in respect of the matters agitated on the voir dire,

namely that they had been beaten by the police. Being apparently

of the view that there was no estoppel, properly so-called, the House of Lords held that the institution of the civil proceedings was an abuse of process. It ius not very clear for what proposition the case stands as authority, but even if it is authority for the rule stated in the headnote (at p.530D) and if the rule there stated represents the law in this country, still I

should not extend it further so as to characterise the attack on

the judgment of Beaumont J. as an abuse of process.

Since that attack is not effectively met either by the law of estoppel, or by the suggestion that it is an abuse of process, the next point is whether I am obliged to entertain it. In my view, the answer is yes. In doing so, however, I am not merely to have regard to the principle of judicial comity, amongst members of the same Court; I am asked to take a different view from his Honour, not merely on an abstract point of law, but on the validity of the very same document he had before him. It is my opinion that in such circumstances a judge should be

especially reluctant to disagree with the former decision.

Second Ouestion: I pass now to consider whether I agree with the view of Beaumont J. It applies, to the deed provided for by the statute, the rule that a party to a deed 15

incompetent as an attesting witness. This is adequately

supported by Seal v. Claridge (1881) 7 9.B.D. 516 at p.519. Further, the wording of the relevant section points towards his Honour's conclusion. Section 216(1L) says in effect that the deed is to be executed by the debtor and trustee and s.216(2) says: "The execution of the deed by the debtor and by the trustee shall be attested by a witness." The natural reading is that the witness is a third person, not one of the first two named. I

therefore agree, with respect, with his Honour's construction of

The other suggestion made was that his Honour's view as to the application of s.222 is inconsistent with my decision in

Re Peter Dawson; ex parte Arthur Andersen and Co. (unreported: 29

March 1985). I there held that "unless and until a declaration

1S made under s.222 that a Part X deed is void, it must be

Section 222 empowers the Court, in certain circumstances, to make a declaration that adeed is void. Section 228(2) 1s the provision restraining the presentation of creditors' petitions and the like where a deed of assignment has become binding. The Dawson case, however, concerned a deed which was" oid on the face of it; here, an examination of the document shows that it was not attested as the statute requires. Although I confess to slightly more doubt about this aspect than the other point, namely the construction of s.216, I do not think I should

differ from the view of Beaumont d.; his Honour's opinion was the

rule that such a deed is valid until declared void under s.222 has no application where there is not such attestation as is

It follows that I accept, with respect, the correctness

of the decision of Beaumont J. and will not make the declaration

Third Question: Whether time should be extended. It is

""(1l) A deed of assignment or a deed of arrangement shall be executed by the debtor anc the trustee within 21 days from the day on which the special resolution requiring the debtor to execute the deed was passed.

It appears likely that the intention was that the whole process of execution, including attestation, should take place within 21 days from the resolution. Since attestation is essential to the validity of the deed, there would not be much point in fixing a time limit for the signing by the debtor and trustee, while leaving the time for attestation without limit. The necessary implication in s.216(2) is that the attestation must take place forthwith on execution by the debtor and trustee. On that view, it is clear from the Full Court's decision in Re Gaqliardi; ex

parte Mount 57 A,L.R. 718 that there is jurisdiction to extend

During the period 8 October 1984 to the date Beaumont J. delivered his judgment, 6 March 1985, the applicants presumably were unaware that the deed was ineffective. I think they can hardly be blamed for that. However, they delayed for some months before filing the present application and no adequate excuse has been put forward for the apparent lack of any sense of urgency. Further, it is possible that people affected by the decision of

On the other hand, neither the debtors nor the creditors, who have been advised of the application, have appeared to oppose it. I have noted that in an unreported

decision of Re Faulkner; ex parte The Official Receiver (February

Lockhart J. gave an extension of time to elect to proceed with an action years after the time limited by s.60(3) had expired; further, that was the second extension which had been given. The case is useful as an illustration of the wide limits of the discretion to extend time and I am of the view that I

should exercise that discretion in favour of the applicants here.

It will therefore be ordered that the time for attestation of the deed of assignment executed by the applicants

and by the debtors on 8 October 1984 be extended to 10 October

Pages are a true copy of the reasons for judgment herein of His Honour

At a glance

Court

Decision date

Before

Source

Judgment (69 paragraphs)

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