Westgold Resources NL v Atkins

Federal Court of Australia|1999-03-12|Before: Nicholson J

REASONS FOR JUDGMENT 1 There are three related proceedings before the Court. 2 In W 7092 of 1999 the applicant ("Westgold") brings a creditor's petition against the estate of the respondent ("Mr Atkins"). The petition alleges that Mr Atkins is a debtor who owes Westgold as creditor the amount of $7,930,178.05 being a judgment debt of $8,764,293.04 plus interest from judgment on 13 May 1999 of $118,159.01 less a set off of $952,274.00. The petition relies on seven alleged acts of bankruptcy including the obtaining of the judgment; the issue of, and non-compliance by Mr Atkins with a bankruptcy notice dated 22 February 1999; the signing by Mr Atkins on 7 May 1999 of an authority pursuant to s 188 of the Bankruptcy Act 1966 (Cth) ("the Act"); and a meeting of Mr Atkins' creditors called pursuant to that authority. 3 In response to the creditor's petition, Mr Atkins has given notice of intention to oppose the creditor's petition. The grounds of opposition relied upon in the notice are:- "1. The creditors of the Respondent by special resolution approved on 25 June 1999 the execution of a Deed of Assignment by the Respondent. 2. That the Respondent did so execute a Deed of Assignment on 2 July 1999. 3. By virtue of paragraphs 1 and 2 above and section 228 of the Bankruptcy Act 1966 the Applicant cannot proceed with Petition." Alternatively, the notice seeks for the hearing of the petition to be adjourned for such period as the Court considers necessary to allow the Deed of Assignment to be executed and thereafter for the petition to stand dismissed. 4 In proceeding W 7104 of 1999 there is an application by Mr Atkins to set aside the decision of Mr Nilant, the first respondent in that matter ("the Trustee") to accept Westgold's proxy at the meeting of Mr Atkin's creditors on 25 June 1999. Further, the application by Mr Atkins seeks a declaration that the execution of the Deed of Assignment by him was duly approved by special resolution at the meeting of creditors on that date. 5 In proceeding W 7108 of 1999, Westgold brings an application in reliance on ss 33 and 239 of the Act in which it claims that any special resolution at the meeting of the creditors of Mr Atkins on 25 June 1999 to approve the execution of the Deed of Assignment by him should be set aside and that a sequestration order should be made under s 239(1) of the Act against his estate. It is accepted on behalf of Westgold that this application will only require determination in the event the Court upholds the application by Mr Atkins in proceeding W 7104 of 1999. 6 It will be seen from this summary that each of these proceedings essentially concerns the same issues, namely:- ". whether a proxy lodged by Westgold prior to the meeting of creditors on 11 June 1999 was valid for the meeting of creditors held on 25 June 1999; . whether the proxy of Westgold validly appointed Mr Paul Rainford to vote at the meeting of creditors; . whether, as a matter of discretion, the Court should review the trustee's decision to accept Westgold's vote; . whether a resolution approving the execution of a Deed of Assignment was put and carried by the meeting of creditors held on 25 June 1999; . whether as a matter of discretion the Court should set aside any resolution of creditors and make a sequestration order against the estate of Mr Atkins."

Evidence 7 In all three proceedings affidavits were accepted into evidence (subject to objections allowed). To some significant degree, there is an duplication of evidence between the proceedings. 8 It was therefore accepted that evidence filed in any one of the matters was relevant evidence for the purpose of the other matters.

Findings of fact 9 The circumstances in which the issues arise are not in dispute, although the effect of them gives rise to contention. Those circumstances are as follows: On 19 February 1999, Westgold obtained judgment against Mr Atkins in the Supreme Court of Western Australia for $8,764,293.04. On 22 February 1999, in reliance upon this judgment, Westgold caused a bankruptcy notice to be issued to Mr Atkins, which was served on 26 February 1999. Mr Atkins filed an application for an extension of time to comply with the bankruptcy notice on 12 March 1999, which was dismissed on 7 May 1999. On 7 May 1999, immediately prior to the dismissal of the application for an extension of time, Mr Atkins signed an authority pursuant to s 188 of the Act appointing the Trustee as his trustee. First Circular and notice of creditor's meeting 10 On 28 May 1999, the Trustee forwarded to creditors of Mr Atkins, a circular together with a notice of meeting of a proposed Part X arrangement in Mr Atkin's estate. This circular gave notice that a meeting of creditors was to be held on Friday, 11June 1999 at 10.00am. 11 The purpose of the meeting was stated to be to consider a proposal made by Mr Atkins for dealing with his affairs. In the accompanying report by the Trustee the debtor's proposal was described as follows: "(1) The net proceeds from the superannuation benefit be surrendered, and applied for the benefit of creditors. $95,551 (2) The net proceeds from the sale of the Meekatharra property be applied, for the benefit of creditors, subject to the existing contract sale being terminated. $39,000 $134,551 (3) The deed is to operate as a release owing to all unsecured creditors from the date of creditors accepting the proposal. (4) The intention of the debtor is to convince certain creditors to prove for a lesser sum in order that other creditors may receive a larger dividend." 12 The circular to creditors also contained the following statement: "2. Representation at Meeting - by Proxy Where a creditor wishes to appoint a person to represent the creditor at the meeting as the creditor's proxy, the creditor must complete theproxy for a meeting of creditors (Form 7) and either: (i) Arrange for the proxy to give the completed form to the controlling trustee at the meeting; or (ii) Send the completed form to the controlling trustee with the complete Proof of Debt form referred to in (1) above. Lodgement with the controlling trustee by facsimile transmission is permissible. A proxy form (Form 7) is attached for completion in this respect. A proxy form will be deemed invalid by the president if it is not completed in full. If a creditor is a corporation, a proxy or power of attorney in favour of its personal representative must be: (a) given under corporate seal unless: - (i) the articles of association have delegated such authority; or (ii) the delegation of that authority has itself been established under seal, in which case it must be; (b) given under the terms of the articles or the duly delegated authority by the required persons." 13 The notice of meeting which accompanied the circular included as item (c) "announcement of appointment of proxies and attorneys, and circulation of instruments appointing proxies and copies of powers of attorney for inspections by the persons present". Item (b) was "appointment of a minute secretary" and item (e) was "election of person to preside at the remainder of the meeting". 14 A proxy form accompanied the circular and was headed as being "Form 7 (16/12/96)" authorised by "s 64ZC" of the Act and described as "Proxy for a meeting of creditors". 15 On 9 June 1999 Westgold purported to appoint Mr Rainford as its proxy to vote on all matters arising at the meeting on 11 June 1999. It did this by completing the Form 7 provided. 16 The mode of attestation required by the form was as follows: "9 Signature/company seal or authorised officer for creditor Signature Date: / /

Westgold purported to complete this by affixing its common seal and having that countersigned by the secretary of Westgold.

Creditor's meeting on 11 June 1999 17 The minutes of the meeting held on 11 June 1999 list those present and whom they represented. Westgold is shown as having been represented by Mr Paul Rainford. The legal firm of Clayton Utz is shown as being represented by Mr Kevin Dundo. The minutes record that "[the Trustee] detailed the proxies that had been received". Then follows a proxy list showing the representation in the case of Westgold and Clayton Utz previously referred to. 18 The minutes then record that the Trustee made comments on certain proofs of debt. 19 The Trustee is quoted as having referred to s 64ZA(8) and (9) of the Act as authorising him to determine any question arising in relation to entitlement to vote and providing for an adjournment of the meeting if he needed a period to determine such a question. 20 It is recorded that it was unanimously resolved by show of hands that a member of the Trustee's office be appointed as minute secretary of the meeting. The minutes record the Trustee refrained from using proxies in his favour to vote for the resolution. 21 It was then moved by Mr Dundo " that the meeting be adjourned until Friday, 25 June 1999, to be held at the same time and place". This motion was withdrawn following a motion moved by Mr Rainford "that the meeting be adjourned for approximately 5 minutes". 22 When the meeting recommenced, Mr Dundo again moved his earlier motion. The minutes show: Mr Rainford stated that under the right of Westgold to vote, it would object to the adjournment and resolve that the proposal of Mr Atkins be put to the meeting. The motion was put to the vote. Creditors voting: Name For Against Westgold Resources NL X Clayton Utz X Ms Gail Oats X St George Bank Ltd X

Method of voting used was show of hands. The Motion for Adjournment was Declared PASSED [The Trustee] refrained from using proxies in his favour to vote for the resolution. Second Circular and notice of creditor's meeting 23 On 18 June 1999 the Trustee forwarded to the creditors of Mr Atkins a further circular and a further notice of meeting. The notice was styled "Notice of adjourned meeting". The circular recited the holding of the meeting on 11 June 1999 and the resolution of creditors to adjourn the meeting for 14 days. It continued by convening an adjourned meeting on 25 June 1999 at 10.00am. 24 A copy of the minutes of the meeting of 11 June 1999 was enclosed and it was indicated that a copy of the transcript was available on request. 25 The agenda proposed in the notice was identical to that in the notice sent with the circular concerning the meeting on 11 June 1999 save that item (b) concerning the appointment of a minute secretary no longer appeared. 26 The circular to creditors did not include the matters which had appeared in the circular pertaining to the proposed meeting on 11 June 1999 including the matters listed under the heading "2. Representation at Meeting - By Proxy". 27 The circular and the notice were accompanied by what was described as a "supplemental report" by the Trustee. In that report it was stated: "At the meeting of creditors, creditors were advised that the original proposal had been withdrawn. As a result, Mr Atkins seeks an opportunity to propose a Deed of Assignment to his creditors, in terms of Part X of the Bankruptcy Act. A copy of Mr Atkins' new proposal is attached, which can be summarised as follows: (1) The advance of $25,000 by way of a gifted sum, to be forwarded to the Controlling Trustee on or before 24 June 1999. (2) The debtor to execute a Deed of Assignment under Part X of the Bankruptcy Act." 28 The circular and notice were accompanied by a fresh proxy form in Form 7. Creditor's meeting on 25 June 1999 29 The meeting of creditors took place on 25 June 1999. The Trustee referred to the prior appointment of the minute secretary, stating that no further resolution for such appointment was therefore required. 30 The minute then records that the Trustee "detailed the proxies that had been received" and that "all proxies were tabled". It further recorded that "all proxies…were admitted to vote". The minutes proceed: "Mr Dundo objected to the admission of the proxy held by Mr Rainford on behalf of Westgold Resources NL, on the basis that creditors were assessing a different proposal from Mr Atkins, thus new proxies should be submitted. Mr Nilant noted the objection. Mr Rainford reminded the meeting that the meeting was an extension of the previous meeting, and hence the proxy remained in place from that meeting." 31 After addressing issues relating to proof of debt the minute continues "the admitted proxy list was as follows:". Then follows a list which includes Westgold as a creditor represented by Mr Rainford. It also includes Mr Dundo as representing Clayton Utz. 32 The minute then records that Mr Dundo moved and Mr Rainford seconded a motion that the Trustee be President of the meeting. An objection was made by Mr Dundo that Mr Rainford should neither be allowed to second the motion nor vote in respect of it. The Trustee noted that a seconder of a motion was not required under the Act. A vote was then taken by show of hands and the vote in favour of the motion by Westgold was accepted. The motion was declared passed with no creditors voting against it. 33 Over the same objections by Mr Dundo a vote was carried by show of hands that the notice convening the meeting be taken as read and that the meeting was held at a convenient time, date and place convenient to the majority of creditors. 34 After declaration of a quorum and the President's address, general discussion followed. The minutes show the Trustee advised that the amount of $25,000.00 had not been provided to the estate by the time of the meeting as was provided for in the Deed of Assignment proposal. The minute continues: "Mr Dundo informed the meeting that Mr Atkins sought to amend his proposal to creditors slightly, by deleting the words "before 24 June 1999". He confirmed that the proposal remained a Deed of Assignment proposal, however the vesting of the $25,000 would depend upon the determination of the right of Westgold Resources to vote at the meeting. DEED OF The President asked if creditors had any further queries. ASSIGNMENT There being none, the meeting proceeded. It was moved by Mr Dundo representing Clayton Utz; "That Mr Atkins" proposal of a Deed of Assignment in terms of Part X of the Bankruptcy Act 1966, be and is hereby accepted". Mr Nilant noted the objection by Mr Dundo that Mr Rainford should not be allowed to vote on the resolution. Creditors voting: Mr & Mrs Dodds and Mr Jim Gray did not indicate a specific manner of voting on their proxy forms for this special resolution. Summary $ % No % FOR 115,569.73 1 1 33 AGAINST 7,930,178.05 98 1 33 ABSTAIN 17,272.33 1 1 33 Totals $8,063,020.11 100 3 100

Method of voting used was show of hands. The Special Resolution was declared FAILED. Mr Dundo objected to the declaration of the resolution as failing. For a Special Resolution to be declared passed there must be a majority in number in favour and 75% in value in favour of the resolution. This resolution achieved neither limb of this requirement." 35 Mr Rainford then moved "that the debtor be required to present his debtor's petition within 7 days". However this special resolution failed. Mr Dundo made the same objections to Westgold voting on this resolution. 36 A resolution was carried fixing the Trustee's remuneration. This was carried over the same objections by Mr Dundo in respect of Westgold seconding or voting for the motion, although no proxies were used to resolve it. 37 The meeting then adjourned. The only motions having been passed at it were those electing the president and fixing the Trustee's remuneration. 38 On 6 July 1999 Westgold presented the creditor's petition. 39 On 5 August 1999 Mr Atkins commenced proceedings seeking to review the decision of the Trustee to accept Westgold's proxy at the adjourned meeting with the consequence that the Deed of Assignment should have been held to have been duly approved by special resolution at that meeting.

Trustee's decision to accept proxy 40 The submissions for both Westgold and Mr Atkins are agreed that the central allegations concern the resolutions at the creditors' meeting on 25 June 1999. Mr Atkins alleges that Westgold's proxy was invalid for that meeting of creditors and was erroneously accepted so that the vote on the Deed of Assignment proposal would have been passed as a special resolution: see ss 5 and 204(1)(b) of the Act. The central substantive issue is therefore whether the Trustee's decision to accept the proxy to Westgold should be reviewed on the grounds the proxy was erroneously or unlawfully accepted.

Jurisdiction to review Trustee's decision 41 It is not in dispute between the parties that the Court has jurisdiction to review a decision of the Trustee to allow Westgold to vote by the proxy. I accept the submission for Westgold that the discretion is one which arises pursuant to s 178 of the Act. That section reads: "178. If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable." 42 For the Court to exercise this power of review it is not necessary that there is any allegation of error or misconduct by the trustee: Wilson v Commonwealth [1999] FCA 219 (12 March 1999). In Staples v Milner (1996) 83 FCR 203 at 206 Cooper J said this jurisdiction "is discretionary, is sourced in s 27 of the Act and given effect to by the exercise of the power conferred in ss 30 and 178 of the Act: Re Dingle; Westpac Banking Corp v Worrell (1993) 47 FCR 478 at 485. He continued: "The court will be reluctant to intervene in cases unless dissuaded the determination of the question of entitlement to vote did affect, or, depending on the view taken, would have affected, the fate of the proposal by producing a different result: Re Dingle; Wespac Banking Corp v Worrell at 485-486" 43 It is for Mr Atkins, as the party seeking to challenge the decision of the Trustee, to establish the existence of an error by the Trustee: cf Re McLean; Ex parte Friends Provident Life Office (1992) 36 FCR 502.

Whether proxy invalidly executed 44 The first principal contention for Mr Atkins relating to the validity of the proxy is that it was not valid for the meeting on 25 June 1999 because it was not executed according to the requirements of the Corporations Law. This challenge was not raised at the creditors' meeting on 25 June 1999. 45 Subsection 127(1) of the Corporations Law provides that a company may execute a document without using a common seal if the document is signed by two directors or a director and company secretary or, in the case of a proprietary company, the director who is the sole director and sole company secretary. Subsection 127(2) provides that a company with a common seal may execute a document if the seal is affixed and the affixing of the seal is witnessed by two directors or a director and company secretary or a sole director in the case of a proprietary company. However, subs 127(4) provides that the section does not limit the ways in which a company may execute a document (including a Deed). 46 Subsection 128(1) provides that a person is entitled to make the assumptions in s 129 in relation to dealings with a company and the company is not entitled to assert that any of those assumptions are incorrect. 47 Subsection 129(4) provides a person may assume that officers of the company properly perform their duties. Subsection 129(5) provides that a person may assume a document as being duly executed by the company if the document appears to have been signed in accordance with subs 127(1). 48 As appears from the evidence, the proxy form signed on behalf of Westgold and dated 9 June 1999 bears the common seal of Westgold adjacent to the signature of the secretary of the company. Westgold is a no liability company so that no question arises whether the company secretary is also the sole director. It is apparent that the seal has been affixed without the signature of a director (in addition to the company secretary) as permitted by subs 127(2). 49 No reliance was placed for Mr Atkins on any relevant requirement of the Articles of Association of Westgold relating to affixing its seal nor were the Articles introduced into evidence. 50 As has been seen, the proxy form was itself headed with a reference to s 64ZC of the Act. To understand how that section comes to have application it is necessary to go to Part X of the Act which deals with "arrangements with creditors without sequestration". It contains sections such as s 189 which addresses the control of property of a debtor who is given authority under s 188. Additionally, it addresses matters relating to the calling of a meeting of creditors under the authority so given: s 194. By s 196 it is provided that Division 5 of Part 1V applies, with any modifications prescribed by the regulations, in relation to a meeting called under an authority under s 188 as if: "(a) the debtor who signed the authority were bankrupt; and (b) the controlling trustee were the trustee in bankruptcy." 51 That Division in Part 4 deals with "meetings of creditors". It is not, for the purpose of the present issues, materially modified by the regulations: see Reg 10.06 and Schedule 6, Part II. Subdivision B deals with the manner in which meetings are to be convened (see ss 64 - 64G). Subsection 64E(1) provides that the notice of meeting of creditors must have attached to it, a form for use in appointing a proxy. No form of proxy is mandated by the section. Subsection 64E(2) requires that the notice must tell the creditors that "the creditor must complete the form of appointment of proxy …". Section 64G requires the agenda to be set out in the notice of meeting. Paragraph (c) of that section requires that the agenda include an item involving "announcement of appointment of proxies and attorneys and circulation of instruments appointing proxies and copies of powers of attorney for inspection by the persons present". 52 Subdivision D deals with "procedure at meetings". By s 64M the trustee is required to announce (a) the names of creditors not participating in person or by telephone but whose proxies or attorneys are participating in person or by telephone; and (b) the names of the proxies and attorneys. By subs 64M(2) the trustee must then circulate the instruments appointing proxies for inspection by persons present at the meeting. By s 64N the trustee must then determine whether a quorum is present. For that purpose a proxy counts: par 64N(2)(b). A proxy is eligible to be nominated for appointment and may be elected to preside at the meeting: s 64P. 53 Entitlement to vote is addressed by s 64ZA. The only persons entitled to vote are creditors who include proxies of a creditor: subs 64ZA(2) and (3). By subs 64ZA(8) "the trustee may determine any question that arises as to the entitlement of a person to vote". 54 The manner of voting is addressed in s 64ZB. There it is provided that subject to subss (3) and (5), the vote of a creditor who is not participating in a meeting in person or by telephone may be cast by a proxy duly appointed by the creditor, or by an attorney duly authorised by the creditor under a power of attorney, being a proxy or attorney participating in the meeting in person or by telephone, and the casting of a creditor's vote by such a proxy or attorney is taken to constitute the casting of a vote by the creditor. The subsections referred to have no relevant qualifying effect. Section 64ZB(3) provides a creditor's proxy or attorney is not entitled to cast the creditor's vote unless the instrument of appointment was received by the trustee before the announcement of appointment required by s 64M. 55 The method of appointment of proxies is dealt with in s 64ZC which reads as follows: "64zc. (1) An instrument appointing a proxy must set out: (a) the full name, and the address of a place of residence or business, of the creditor; and (b) the full name, and the address of a place of residence or business, of the person appointed as proxy. (2) An instrument appointing a proxy may appoint more than one person as proxy but: (a) if the first person named in the instrument as a proxy is participating in person or by telephone in the meeting, only that person may cast the creditor's vote; and (b) any other person named in the instrument as a proxy may cast the creditor's vote if, and only if, that person is participating in person or by telephone in the meeting and no person named in the instrument as a proxy before the name of that person is participating in person or by telephone in the meeting. (3) An instrument appointing a proxy must set out the bankrupt's name and must state whether the appointment relates to a particular meeting or to all meetings. (4) An instrument appointing a proxy may authorise the proxy to cast the creditor's vote at a meeting to which the proxy relateson all matters arising at the meeting or may authorise the proxy to cast the creditor's vote at that meeting only on matters specified in the instrument. (5) An instrument appointing a proxy may direct the proxy as to the manner in which the proxy is to vote on a particular matter or matters that may arise at the meeting or on a particular motion or motions that may be proposed at the meeting. (6) If an instrument appointing a proxy purports to appoint thebankrupt as a proxy, the purported appointment does not have any effect but, if the instrument also appoints another person as a proxy, the appointment of the other person is not affected and the instrument has effect as if the purported appointment of the bankrupt were not included." It is not contended on behalf of Mr Atkins that there has been any non-compliance with the particular requirements of this section. 56 It will be observed that the section itself does not make any provision in relation to the manner of the execution of a proxy. Form 7 provides for the execution in the form previously shown. Two observations may be made concerning this. 57 Firstly, the signature clause in the form as prescribed from 1 July 1997 - and therefore in force at the relevant date when Westgold executed its proxy - is numbered 10. However the form of proxy executed by Westgold and circulated with both the first and second circulars by the Trustee was that which was in use until 16 December 1996 in which the signature clause was numbered 9. Approval of that form was rescinded on 17 June 1997 by an instrument issued by the Inspector-General in Bankruptcy: Cth Gazette No GN25, 25 June 1997. In the same instrument, approval was given to Form 7 (1 July 1997). The material difference between the two forms is that in the new form a new clause 9 was inserted reading: "Has the debt been assigned to you?" The person completing the form is required to mark either "yes" or "no". 58 Secondly, the signature requirements are in themselves capable of being read as requiring either the signature or company seal of the creditor or alternatively the signature of an authorised officer for the creditor. On that reading the reference to "company seal" would itself be sufficient compliance with the requirements of the form. Furthermore, a signature by an authorised officer for a corporation creditor would itself be sufficient compliance. The statement of requirements for completion of a proxy by a corporation in the first circular is not therefore required by Form 7. 59 It is also relevant that s 64ZF provides "a meeting, or anything done at a meeting, is not invalid because a requirement of this subdivision has not been strictly complied with if the requirement has been substantially complied with". The section is applicable to "a requirement of this Subdivision". The requirement in respect of completion of a proxy is that in s 64ZC. There is no requirement that a proxy only be executed in the approved form. 60 Against this background of the provisions of the Corporations Law and of the Act, I do not consider that the Trustee's decision can be found to be in error on the ground that no valid proxy was given by Westgold. My reasons for that conclusion are as follows: (1) Even if the requirements of the Corporations Law were to provide the governing rule of law, subs 127(4) make it apparent that a company is not limited in the way in which it may execute a document. (2) The proxy form did not want for compliance with the requirements of s 64ZC of the Act. (3) Section 64ZF operates so as to make the completion of Form 7 (16/12/96) a substantial compliance with a requirement to file a proxy or to file a proxy in Form 7 (1/7/97). My reasons for this conclusion are: (a) The effect of s 64ZF relates to a meeting or "anything done at a meeting". The relevant act at the meeting was the announcement by the Trustee of the appointment of the proxy. I do not agree with the submission for Mr Atkins that the Trustee's act is a step in the process occurring before the meeting and not during it. That is not the effect of s 64ZB(3). (b) The difference between Form 7 (16/12/96) and Form 7 (1/7/97) was not a material difference in the particular circumstances of this case. Even if the new clause 9 in Form 7 (1/7/97) was inserted having regard to s 64ZB(8) and to address the mischief explained by Drummond J in Bechrose Pty Ltd v Jefferson (Trustee) [1999] FCA 1153, it was not a material consideration here where the evidence before the Court is that Westgold was a creditor of Mr Atkins and not an assignee of the debt. (c) It is not the effect of s 64ZB(8), s 64AZ(6) and s 64D of the Act that it is such an essential requirement of the form of proxy that a creditor state whether the debt has been assigned or not, that s 64ZF cannot operate in relation to it. The requirements of s 64D in relation to provision of a written statement of assignment of a debt are conditional on the circumstances warranting that statement. Furthermore, s 64ZC has not been amended to encompass any new requirement to the effect contended. (4) The requirement in either Form 7 (16/12/96) or Form 7 (1/7/97) in relation to a company seal is not expressed in terms which make it mandatory for a corporation to act through the application of its company seal to the proxy form. However, the requirement for the affixing of a company seal on the proxy form is the clearest direction given by the legislature on the issue of the method by which a proxy is to be completed by a corporation pursuant to s 64ZC. Furthermore, the company secretary who did affix his signature was an authorised officer for Westgold as creditor. (5) No objection was made at the meeting of creditors on 25 June 1999 that the proxy should not be accepted because it did not comply with the Corporations Law. The only objection was that the proxy should not be accepted because creditors were assessing a different proposal from Mr Atkins. In Loeskow v Avokah Irrigation Pty Ltd (Receiver and Manager appointed) (unreported Federal Court of Australia 7 November 1995), Foster J (with whom Lockhart and Ryan JJ agreed) upheld a refusal by a primary judge to consider the question of validity of the appointment of a proxy in the absence of the issue having been raised before the chairman of the meeting. There is a sound reason behind that: namely, had the matter been raised, steps may have been taken to address it in some way.

Whether a fresh proxy required 61 The case for Mr Atkins then contends that the meeting of 25 June 1999 was a fresh meeting and required a new proxy. It is said that meeting was a new meeting because it dealt with a different proposal. It is also said that the status of the meeting as a new meeting is further evidenced by the taking of a fresh vote for a new president of the meeting; the sending out by the Trustee on 18 June 1999 of a new report; and the issue of a new proxy form with the notice of the second meeting. In these circumstances it is said that it is clear the proxy given by Westgold only related to the meeting on 11 June 1999. 62 In my opinion the decision of the Trustee to accept the Westgold proxy cannot be found to be erroneous on the ground that the Trustee should have required a fresh proxy from Westgold at the adjourned meeting. My reasons for that conclusion are as follows: (1) Regard must be had to the provisions of s 64Y of the Act which read as follows: "64Y. (1) If, at any time during a meeting, the meeting is adjourned, or a resolution is passed for the adjournment of the meeting: (a) the adjourned meeting is taken to be a continuation of the original meeting; and (b) without limiting the application of paragraph (a): (i) the persons who carried out the duties of President and minutes secretary at the original meeting are to continue to do so at the adjourned meeting; and (ii) any matters required to be dealt with at the original meeting that were not so dealt with are to be dealt with at the adjourned meeting. (3) The trustee must give notice of the time, date and place of the adjourned meeting to each creditor in accordance with subsection 64A(2)." It cannot be contended that the first proxy only related to the meeting on 11 June 1999 in the face of the statutory provision contained in s 64Y. Where the adjourned meeting is to be taken as a continuation of the original meeting, the proxy is by force of that statutory provision carried forward in its effect, to the adjourned meeting treated as a continuation of the original meeting. This is so even though the meeting referred to in the proxy of Westgold is 11 June 1999. (2) The meeting was called pursuant to the duty of the Trustee to call a meeting of the debtor's creditors pursuant to s 190 of the Act. That is in the context of the Trustee having taken immediate control of the debtor's property and affairs. The proposal advanced by Mr Atkins as the debtor was required pursuant to s 188A of the Act which provides that the debtor must give the controlling trustee a statement of the debtor's affairs and a proposal for dealing with them under the relevant Part of the Act. There is no reason to read either s 188A restrictively to confine a debtor to only one proposal where new circumstances have emerged nor to require a controlling trustee to call a different meeting for a new proposal. The controlling trustee discharges the obligation by calling a meeting of the debtor's creditors pursuant to s 190. Section 64Y provides that any adjourned meeting is a continuation of the original meeting. The emergence of a new proposal does not result in a re-characterisation of the meeting called by the controlling trustee. There is no case made out that the Act should be read down to prevent an adjourned meeting from dealing with any new matter. (3) The minutes of the meeting of 11 June 1999 do not disclose that any person was elected as president of the meeting held on that date. In those circumstances it would be appropriate that an election take place at the meeting convened on 25 June 1999, which is what occurred. (4) The absence of an agenda item requiring reappointment of a minute secretary reinforced the adjourned character of the meeting. (5) The presence of a new proxy form with the second notice of adjourned meeting does not carry the necessary inference that a new meeting is being called. The actual purpose is a matter of speculation, but any necessary inference is negated by the possibility that a new form could have been forwarded in order to accommodate a change of individuals unable to attend on the second date but formally present on the first date. Reading the minutes of the meeting on 11 June 1999, I consider the issue of entitlement to vote had not there been finalised so that the proxy list in the minutes is to be understood (as the minutes make clear) as a list of received proxies. The announcement of proxies pursuant to s 64M did not occur until the meeting on 25 June 1999. Consequently, circulation of the fresh proxy form was not inappropriate. Arguably, in any event, s 64E applied to the notice of adjourned meeting so that it was required the Trustee attach a proxy form. cf s 64ZB(3) of the Act. (6) Likewise the sending out by the Trustee on 18 June 1999 of the supplemental report is not indicative of a fresh meeting being called. The word "supplemental" suggests continuity with the prior report and hence with the meeting. (7) Cases relied on for Mr Atkins by way of analogy are not conclusive of the issues here. They relate to provisions in articles not shown to be present here or are otherwise distinguishable: Scadding v Lorant (1951) 3 HLR 418; 10 ER 164 at 169; Shaw v Tati Concessions Ltd [1913] 1 Ch 292 at 297; McLaren v Thompson [1917] 2 Ch 261; Neuschild v British Equatorial Oil [1925] 1 Ch 346; Jackson v Hamlyn [1953] 1 All ER 887.

Just and equitable considerations 63 As Mr Atkin's claim in matter W 7108 of 1999 cannot succeed for the foregoing reasons, it follows it is not necessary for the Court to turn to the matters arising pursuant to s 239 of the Act in proceeding W 7108 of 1999. Issues which would have been relevant to a consideration of the unreasonableness of the composition and otherwise pursuant to subs 239(2) are considerations which would be relevant to the exercise of the discretion arising in the Court pursuant to s 178. However, Mr Atkins sought to discharge the onus falling on him pursuant to s 178 only by arguing the matters which were the subject of the foregoing reasons in which I have concluded against him. It is not, therefore, necessary to canvas in detail the contentions made why it is "just and equitable" that the Trustee's decision should not be disturbed. 64 Matters relevant to a just and equitable determination are that there was only one creditor supporting a proposal for a minute dividend to be paid to the creditors and the vast majority of value of debts was against the proposal. The effect of approving the Deed of Assignment would be to favour a creditor owed $115.000.00 compared to Westgold as a creditor owed $7.8 million and it would provide for a very small return to creditors. Furthermore, Mr Atkins failed to pay by the due date the amount referred to in his revised proposal to creditors. Mr Dundo's proposed amendment at the meeting of 25 June 1999 was not put to the meeting. Even if it had been, it may have so changed the substance of the proposed special resolution as to be impermissible: Re Moorgate Mercantile Holdings Ltd [1980] 1 All ER 40. Even on the case for Mr Atkins, there was no majority seeking the Deed of Assignment. Bearing in mind what was said in Re Dingle; Westpac Banking Corp v Worrell at 485-486 there is nothing to persuade the Court to depart from the reluctance which it should exhibit to intervene in considering a just and equitable ground. 65 For the above reasons it follows that the attack on the Trustee's decision in the case for Mr Atkins does not succeed. I therefore answer the questions said to arise and listed at the commencement of these reasons as follows: · the Westgold proxy was valid for the meeting of creditors held on 25 June 1999; · the Westgold proxy did validly appoint Mr Rainford for that meeting; · there is no ground to review the Trustee's acceptance of that proxy; · the resolution approving the execution of the Deed of Assignment was not put and carried as a special resolution at the meeting on 25 June 1999; · there is not discretionary consideration making it appropriate for the Court to set aside any resolution of creditors nor any relevant resolution to be set aside. 66 It follows that in matter W 7104 of 1999 the amended application should be refused. That is, Mr Atkins does not succeed in his claim either that the decision of the Trustee to accept Westgold's proxy at the meeting of creditors on 25 June 1999 should be set aside or that the execution of a Deed of Assignment by Mr Atkins was duly approved by special resolution at that meeting. The Westgold proxy not being invalid, the consequence is that there was no valid special resolution duly approving the execution of the Deed of Assignment.

Creditor's petition 67 The Court having reached the position where it declines to review the Trustee's decision and declines to make the orders sought by Mr Atkins in W 7104 of 1999, it is then necessary to consider whether a sequestration order should be made against the estate of Mr Atkins. 68 The creditor's petition relies on three separate acts of bankruptcy by Mr Atkins; namely his failure to comply with a bankruptcy notice - s 40(1)(g) of the Act; the appointment by him of a trustee pursuant to s 188 of the Act - s 40(1)(i) of the Act; and the calling by him of a meeting of creditors pursuant to an authority given to a trustee - s 40(1)(j) of the Act. 69 Westgold has formally proved the presentation of the creditor's petition; the elements of the acts of bankruptcy; verification of the matters in the creditors petition by affidavit; service of the bankruptcy notice and final determination of the application for extension; the absence of proceedings in relation to the debtor at the time of the presentation of the petition; the search at the Insolvency Trustee Service of Australia Register and verification close to the hearing that the debt is still due and owing. 70 Accordingly, in the circumstances of this case it is appropriate for a sequestration order to be made against the estate of Mr Atkins.

Conclusions 71 In matter W 7108 of 1999, the application should be dismissed. 72 In matter W 7104 of 1999, the amended application should be dismissed. 73 In matter W 7092 of 1999, a sequestration order should be made against the estate of Mr Atkins. 74 Counsel should be heard as to costs in all matters. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R D Nicholson.

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