Re Bernard Putnin v Denis John Reynolds and Peter Francis White [1984] FCA 239 (23 August 1984)

FEDERAL COURT OF AUSTRALIA

Re: BERNARD PUTNIN
And: DENIS JOHN REYNOLDS and PETER FRANCIS WHITE
No. WA G54 of 1984
Re: JOSEPH LEVIT
And: DENIS JOHN REYNOLDS and PETER FRANCIS WHITE
No. WA G55 of 1984
Re: MEYER MARTIN LEVIT
And: DENIS JOHN REYNOLDS and PETER FRANCIS WHITE
No. WA G56 of 1984
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.

CATCHWORDS

Administrative Law - judicial review - decision of stipendiary magistrate in committal proceedings - decision to commit for trial - whether error of law - whether prima facie case against applicants of conspiracy to defraud - duty of trustee under Part X of Bankruptcy Act to get in and realise assets - share in company not included in Statement of Affairs - whether share included in resolution of creditors - whether share included in deed of arrangement - obligations of trustee under deed of arrangement - whether decision by creditors a variation of scheme or amendment of deed - relevance of discretion in proceedings for review

Administrative Decisions (Judicial Review) Act 1977 s.5

Bankruptcy Act 1966 ss. 187, 188, 194, 204, 214, 233, 235

HEARING

PERTH
23:8:1984

ORDER

(No. WA G54 of 1984)

1. The application be dismissed.

2. The applicant pay the respondents' costs of
the application to be taxed as one set of
costs with the costs in the applications Nos. WA
G55 of 1984 and WA G56 of 1984.

( No. WA G55 of 1984 )

1. The application be dismissed.
2. The applicant pay the respondents' costs of
the application to be taxed as one set of
costs with the costs in the applications Nos. WA
G54 of 1984 and WA G56 of 1984.

( No. WA G56 of 1984 )

1. The application be dismissed.
2. The applicant pay the respondents' costs of
the application to be taxed as one set of
costs with the costs in the applications Nos. WA
G54 of 1984 and WA G55 of 1984.

DECISION

These are three applications under the Administrative Decisions (Judicial Review) Act 1977; by consent they were heard together.

2. Each of the applicants, Mr. Putnin, Dr. Levit and Mr. Levit has applied for an order of review in respect of a decision made by Mr. D.J. Reynolds S.M. in committal proceedings that there was sufficient evidence to put the applicants upon their trial on a charge that:

"Between the 8th day of January 1980 and the
19th day of March 1982 at Perth, Bernard
Putnin, Joseph Levit and Meyer Martin Levit
conspired together to defraud the
Commonwealth of Australia in its capacity as
a creditor of the said Joseph Levit. The
said Bernard Putnin, Joseph Levit and Meyer
Martin Levit agreed together that the said Bernard

Putnin as trustee under a deed of

arrangement dated 11th day of February 1980
made pursuant to the provisions of Part X of
the Bankruptcy Act 1966 and executed by the
said Joseph Levit would not get in and
realise the A Class founders share held by
the said Joseph Levit in Parktown Holdings
Pty Ltd and distribute the proceeds thereof
to the creditors of the said Joseph Levit
contrary to Section 86(1)(e) of the Crimes
Act 1914."

3. The applicants invoked the jurisdiction of the Federal Court under s.5 of the Judicial Review Act on the ground that the decision of the learned magistrate was a decision to which the Act applies, being a decision of an administrative character made under an enactment viz. the Judiciary Act 1903. The second respondent, to whom I shall refer simply as "the respondent", did not challenge the jurisdiction of the Court to review the decision, no doubt in view of the decision of this Court in Lamb v. Moss [1983] FCA 254; (1983) 49 ALR 533. The first respondent took no part in the proceedings.

4. The charges against the applicants arose out of proceedings under Part X of the Bankruptcy Act 1966 ("the Act") involving Dr. Levit. On 11 February 1980 he executed a deed of arrangement with Mr. Putnin as trustee. The terms of that deed are crucial to the submissions made on behalf of both the applicants and the respondent. But, before turning to the deed, it is necessary to say something about the events that led to its execution.

5. On 30 January 1980 a meeting of creditors of Dr. Levit, held pursuant to s.194 of the Act (that is, held in pursuance of an authority given by Dr. Levit under s.188 of the Act), took place at the offices of B. Putnin & Associates, public accountants. Mr. Putnin is a proprietor of that firm. At the meeting Mr. Putnin introduced himself as the "controlling trustee" by reason of the authority given by Dr. Levit. Section 188 permits a debtor who desires that his affairs be dealt with under Part X, without his estate being sequestrated, to authorise a registered trustee to call a meeting of his creditors and to take over the control of his property.

6. At the meeting a document described as "Statement of Affairs", and clearly intended to be a statement of affairs under the provisions of the Act, was distributed to creditors. The document was accompanied by the required statutory declaration by Dr. Levit that it contained "to the best of my knowledge and belief, a true and complete statement of my affairs as at the 8th January, 1980". Although the statement of affairs and statutory declaration were in a form indicating that they had been prepared by B. Putnin & Associates, Mr. Putnin explained to the meeting that the figures in the statement had been provided by E. Rhine & Co., Dr. Levit's accountants, and "were as accurate as they could be under the circumstances".

7. The meeting was adjourned to consider several motions, including motions that the debtor be requested to enter into a deed of arrangement, that his property as shown in the statement of affairs (save for his interest in his medical practice) be disposed of for the benefit of creditors and that the debtor make monthly contributions to the trustee for the benefit of creditors.

8. The adjourned meeting took place on 6 February 1980. According to the minutes of that meeting, Mr. Putnin tabled "two Schedules prepared by the debtor's accountants, and legal representative, to enable the creditors to more accurately determine the debtor's assets and commitments". One of those schedules was an estimate of income and expenditure of the medical practice for the year ending 30 June 1980. No particular reference was made to this document in the course of argument. The other schedule was headed "Estimated Valuation of Assets". Essentially it did two things. The first was to refer to certain assets in the statement of affairs and offer a revised estimate of their value. The second was to make reference to two assets which had not been mentioned in the statement of affairs. They were set out in the schedule in this way:>

"Add

(1) Interest by way of 1 share
in "Parktown Holdings Pty.
Ltd" $11,000 ?

(2) Interest, if any, in Levit
Family Trust - ? "

9. No particular reference was made in argument to the interest in the Levit Family Trust; it is the share in Parktown Holdings Pty. Ltd. with which these proceedings are concerned.

10. According to the minutes, Mr. Putnin said:

"It had been difficult to evaluate the
debtor's share in Parktown Holdings. If the
Company was wound up or the share sold, the
nett worth would be approximately $10,000.
The other members of the shareholders are
members of the family".

11. A question was asked about Parktown Holdings itself but Mr. Putnin said that the company was quite solvent and, being a separate entity, was no business of the creditors. The motions from the adjourned meeting were then put and carried. It is important to note the precise terms of two of them.

"...that the debtor be requested to enter into
a Deed of Arrangement pursuant to Section
204(1)(b) of the Bankruptcy Act, 1966".

"...that the debtor's property as shown in the
Statement of Affairs, except his interest in
the medical practice, be disposed of in an
orderly manner for the benefit of the creditors".

12. Following a discussion about the terms of the deed of arrangement, a further motion was passed which included the following:

"(d) That the Trustee realise the assets
shown in the Statement of Affairs, excluding
the debtor's interest in the medical
practice, at the following values:-

(i) Cash held in Solicitor's Trust Account,
$80,000, less fees applicable.

(ii) Surf Cat, boat and trailor to be sold by
public auction.

(iii) Debtor's share in Serpentine Pastoral
Company upon settlement.

(iv) To sell the debtor's interest in 16
Seymour Avenue, Dianella to Dr. Pamela
Levit at sworn valuation.

(v) That a valuation of the property at 16
Seymour Avenue, Dianella, be obtained
from a sworn valuer to be nominated by
the President of the Australian
Institute of Valuers Inc., Western
Australian Division.

(vi) That the debtor's half share in the
furniture at 16 Seymour Avenue,
Dianella, be sold to Dr. Pamela Levit
for $10,000.
(vii) That the debtor's interest in Parktown
Holdings Pty. Ltd. be left for review at
the six monthly meeting".

13. On 11 February 1980 Mr. Putnin issued a circular to creditors, recording that a deed of arrangement had been executed under the provisions of the Act. In compliance with the Act, Mr. Putnin filed the statement of affairs in the office of the Registrar in Bankruptcy. The document as filed did not include the two schedules to which reference was made at the meeting on 6 February.

14. As mentioned earlier the deed of arrangement is also dated 11 February 1980. Before considering the terms and effect of the resolutions and the deed, it is appropriate to say something about the operation of Part X of the Act. Proceedings under Part X are initiated by the debtor authorising a registered trustee or solicitor to call a meeting of his creditors. By reason of s.204 of the Act, the creditors may, by special resolution, require the debtor to execute a deed of assignment or a deed of arrangement. A deed of assignment effects an assignment of all the divisible property of the debtor for the benefit of his creditors (sub-s.214(2)). A deed of arrangement provides for the arrangement of the affairs of a debtor with a view to the payment, in whole or in part, of his debts (see the definition in sub-s.187(1)). Its terms are a matter of agreement between debtor and creditors. Once entered into in accordance with the Act, it is binding on all creditors (sub-s.233(1)). A deed of arrangement is terminated by the passing of a special resolution to that effect by a meeting of creditors, by an order of the Court or by the occurrence of any circumstances or event on the occurrence of which the deed provides that it is to terminate (s.235).

15. It is because a deed of arrangement is essentially consensual in nature and because its operation and effect are to be gathered from the deed itself rather than from the provisions of the Bankruptcy Act, that the terms of the deed are so important. A deed of arrangement must be entered into in accordance with Part X and must comply with the requirements of Part X (sub-s.233(1)), but subject to that obligation there is wide scope for the provisions it may embody. See Gee v. Schmutter [1971] HCA 6; (1970) 123 CLR 503; Re Dowling; Ex parte Jamison (1979) 36 FLR 384.

16. The deed of arrangement contains a recital that pursuant to para. 204(1)(b) of the Act the debtor was requested to enter into a deed of arrangement on certain terms, one of which was said to be:

"(a) That the Debtor shall convey and assign
to the Trustee all his interest in any
real or personal property with the
exception of and the exclusion of his
interest in the Medical Practice
conducted by him at 23 Outram Street,
West Perth, to be disposed of by the
Trustee in an orderly manner for the
benefit of the creditors".

17. There was in fact no such resolution, in particular no resolution that the debtor convey and assign all his interest in property to the trustee. The resolution was expressed with reference to the statement of affairs. By the terms of the deed:

(1) The debtor (Dr. Levit) conveyed and assigned to the
trustee (Mr. Putnin) all his interest in any real
or personal property, save for his interest in the
medical practice, upon trust for the benefit of the
creditors.

(2) The debtor undertook to make monthly payments of
not less than $1500, to be subject to review at the
end of six months from the date of the deed and
thereafter at six-monthly intervals during the
currency of the deed.

(3) The trustee accepted the appointment and the
assignment of property. This acceptance appears in
cl.5; because of the importance that clause assumed
during argument, it is advisable to set out most of
its terms verbatim:

"5. The Trustee hereby accepts the
appointment as Trustee of this Deed and the
conveyance and assignment of the real and
personal property upon the Trustee herein
contained and it is hereby mutually agreed by
the parties hereto and has been confirmed by
the creditors present at the meeting
hereinbefore recited that the Trustee shall

(a) hold the said property of the Debtor in
trust during the currency of this Deed
of Arrangement in accordance with the
terms hereof and subject to the further
instructions of the creditors.

(b) realise the assets shown in the Debtor's
Statement of Affairs excluding the
Debtor's interest in the said Medical
Practice upon such terms and conditions
as agreed to by the creditors".

19. The deed of arrangement purports to mirror the decisions made at the meeting of creditors. In express terms, it does not do so. Whether, on a fair reading of the minutes and the deed, it does so is another question. In the applicants' submission, the matter is important because the conspiracy alleged against them is that they agreed that Mr. Putnin "would not get in and realise the A Class founders share held by the said Joseph Levit in Parktown Holdings Pty Ltd and distribute the proceeds thereof to the creditors ...". The case for the applicants is a relatively straightforward one. They say that, under the terms of the deed, there was no duty imposed on Mr. Putnin to get in and realise the share and that, there being no duty, there could be nothing unlawful in an agreement not to get in and realise that share (if such an agreement was made). The respondent contended that the matter cannot be looked at so narrowly and I shall say something more of that contention later in these reasons.

19. Not only does the deed of arrangement fail to mirror precisely the resolutions passed at the meeting of creditors, but it is not free from obscurity in its terms. For instance, what is meant by the words "upon such terms and conditions as agreed to by the creditors"? Does it mean "as may be agreed to" or "as were agreed to"? I think it must mean the latter otherwise it would be quite open ended and subject to unilateral decision by the creditors. The "terms and conditions" must, I think, relate to the decision made that the trustee realise certain assets for the figures shown in the creditors' resolution or, "by public auction", "upon settlement" or "at sworn valuation". It is difficult to fit the resolution that the debtor's interest in Parktown Holdings "be left for review at the six monthly meeting" into any of those categories.

20. Counsel for the applicants argued strenuously that Dr. Levit's share in Parktown Holdings was not part of the statement of affairs, that it did not become so simply because reference was made to it at the meeting on 6 February 1980 and that any reference in the deed to assets could not extend to the share. In the applicants' submission, sub-para. 7 of para. (d) of the resolution dealing with the general terms of the deed of arrangement simply did not fit as one of those sub-paragraphs. Rather, it stood as an independent paragraph, meaning no more than that the creditors had resolved that the whole question of the debtor's interest in Parktown Holdings be deferred. Counsel for the respondent submitted that, when the matter is looked at in its entirety, it is apparent that the creditors intended to deal with all the assets of Dr. Levit as shown in the document entitled statement of affairs and in the schedules produced at the meeting. Furthermore, said counsel, para. (d) of the resolution is a decision that the trustee realise all the assets therein shown including the share in Parktown Holdings. Paragraph (d), it was argued, is concerned with realisation at certain values, some of which are expressed in money terms and some of which are otherwise expressed. On 6 February 1980 the creditors resolved that Dr. Levit's interest in Parktown Holdings be sold and it was only the basis upon which a sale take place that was to be the subject of further decision by the creditors.

21. Clause 5 of the deed distinguishes between the property of the debtor and assets shown in the statement of affairs. I do not think this was unintentional, particularly as cl.5(a) requires the trustee to hold the debtor's property "in accordance with the terms hereof and subject to the further instructions of the creditors". To hold the property "in accordance with the terms hereof" is to hold it subject to the obligation to realise the assets shown in the statement of affairs. But to hold it "subject to the further instructions of the creditors" must refer to, or at any rate include, a decision to be made regarding Dr. Levit's share in Parktown Holdings. Whether, on the proper construction of the deed, there was no obligation cast on the trustee to dispose of the share until so directed by the creditors or whether his obligation to realise the assets extended to the share, but upon terms to be decided by the creditors, may not be crucial. In either case the fact is that no decision regarding the share was thereafter made by the creditors. Indeed, the applicants say, no decision could be made for once the deed was executed the position of debtor was controlled by the deed and no later decisions concerning the assets of the debtor could be made by the creditors except pursuant to some further deed, an eventuality which did not take place.

22. This argument raises questions of both fact and law. I shall deal first with the question of fact.

23. There was a meeting of creditors on 9 June 1980, earlier than the six-monthly meeting mentioned at the meeting on 6 February. No reference was made to Dr. Levit's share in Parktown Holdings at that meeting. There was a further meeting on 10 September 1980 and this may be taken to be the six-monthly meeting referred to earlier. At that meeting Mr. Putnin reported that "all properties in the Deed had now been realized". Mr. Steffanoni, representing the Deputy Commissioner of Taxation, raised the question of Dr. Levit's involvement in Parktown Holdings. The minutes record this answer:

"Mr. Putnin pointed out that the Directors of
Parktown Holdings are Alex Rosenwax and
Martin Levit. As Yarwood Vane did not make
the books available until the previous day he
had not really had a good chance to look into
the matter. However the tax returns have
just been prepared and he will submit them to
the Directors and then see how much is
attributable to Joseph Levit".

24. The next meeting of creditors took place on 6 March 1981. The minutes incorrectly identify the date as 7 March. Mr. Putnin reported on moneys received from the sale of assets and also payments made. Mr. Court, representing one of the creditors, asked about Parktown Holdings. The minutes record questions asked and queries raised by Mr. Court and by Mr. Bacon who then represented the Deputy Commissioner of Taxation. I shall not set out the fairly lengthy references in the minutes. The effect of Mr. Putnin's answers was that the Levits were not directors of Parktown Holdings, that he did not know whether Dr. Levit had sole voting rights in respect of his share, that the Levit children were shareholders of the company and the only recipients of its income and that Mr. Rosenwax and Mr. Levit were the directors. The meeting resolved that:

"... the Trustee be authorised to take such
steps as are necessary to find out what
powers Dr. Joseph Levit has in relation to
Parktown Holdings Pty. Ltd. and if there has
been any change in the shareholding of the
company within the last two years to obtain
details of the change".

25. At the next meeting of creditors, held on 14 September 1981, Mr. Court again asked about Parktown Holdings. Mr. Putnin replied that Dr. Levit had no power in the company, adding "He is merely an ordinary shareholder. In 1980 Joseph and Pamela Levit resigned their positions as directors and Mr. Martin Levit and Mr. Alex Rosenwax are now directors ". Mr. Bacon asked why Dr. Levit had relinquished his powers after the date of the first meeting of creditors and Mr. Simon, a solicitor representing Dr. Levit, said that:

"... in view of Dr. Levit's difficult
situation, he considered that he should get
out of everything. Parktown Holdings Pty Ltd
is a family company and he held purely a
controlling position in the company, and
wanted to get out of it".

26. Mr. Bacon commented that it seemed that Dr. Levit had gone about "divesting his assets" but Mr. Simon replied that "he (Dr. Levit) could not take any equity away from the shareholders by exercising those powers". The minutes record that Mr. Court then said that "this seemed to answer the questions raised at the last meeting as to what powers Dr. Levit held in the company". There is no further reference to Parktown Holdings in the minutes of that meeting.

27. The next and last meeting of creditors took place on 19 March 1982. The minutes contain no reference to Parktown Holdings.

28. There was evidence before the learned Magistrate which, if accepted, would indicate that much of what Mr. Putnin told the meetings on 10 September 1980, 6 March 1981 and 14 September 1981 was simply untrue. At its most favourable, from Mr. Putnin's point of view, there was an active concealment of matters known to him.

29. Under the memorandum of association of Parktown Holdings, the capital of the company was expressed to be $20,000 divided into 19,998 ordinary shares of $1 each and 2 founders' shares of $1 each, one such share to be issued to Dr. Levit and the other share to his wife Dr. Pamela Levit. Paragraph 4 of the memorandum provided that while the founder's share number 1 is held by Dr. Levit, he is the only person with power to vote at meetings of the company. The rights, priviliges and advantages attaching to that share were expressed to cease "on the death or permanent incapacity of Joseph Levit or when relinquished by him in writing". In that event his founder's share became classified as an ordinary share and founder's share number 2, held by Dr. Pamela Levit, entitled the holder to those rights, privileges and advantages unless previously classified as an ordinary share by the holder of founder's share number 1.

30. Article 23 empowered the holders of the founders' shares, or either of them, to acquire the ordinary shares "by offering to the shareholder the nominal value of the shares in the Company held by the shareholder".

31. By a letter, which is undated but which was written on or just before 1 May 1980, Mr. Putnin wrote to Mr. Simon saying that he had had a discussion with Mr. Levit "who thinks it would be preferable if the Levits relinquished their positions as Directors etc. in their family trusts. As you know they have a family trust in the name of Parktown Holdings Pty. Ltd. and this trust owns property and has at the moment quite a healthy bank balance". The letter asked that Mr. Simon prepare the necessary documents to achieve this object. By letter dated 25 July 1980 Mr. Putnin wrote to Dr. Levit enclosing "various letters of resignation and various consents of the new Directors to act". He also asked that Dr. Levit give consideration to changing the registered office of the company. This was done and as from 31 July 1980 the address of the registered office was 12 Parliament Place, West Perth, the address of B. Putnin & Associates. The annual return of Parktown Holdings made up to 17 September 1980, lodged by B. Putnin & Associates, showed capital profits reserve of $170,992 including a fixed deposit with the Perth Building Society of $115,460.64. On 11 September 1980 Mr. Putnin wrote to Drs. J. & P. Levit a letter in which he referred to the Commissioner of Taxation's apparent interest in the founders' shares in Parktown Holdings as evidenced by Mr. Steffanoni's remarks during the meeting held on Wednesday 10 September 1980.

32. On 23 September 1980 Mr. Simon wrote to Bernard Putnin and Associates enclosing a form of declaration by which Dr. Levit relinquished his rights in respect of founder's share number 1 and classified Dr. Pamela Levit's founder's share as an ordinary share. On 24 September 1980 Mr. Putnin sent the form to Dr. Levit who executed it though the document remains undated. Attached to the form are minutes of a meeting of directors of Parktown Holdings said to have been held on 24 September 1980. These minutes also appear in the minute book of the company. The minutes record that Mr. M. Levit and Mr. A.S. Rosenwax, directors, were present. Mr. Rosenwax gave evidence that he attended no such meeting.

33. On 9 March 1981 Mr. Putnin again wrote to Mr. Simon referring to "Mr. Baker's queries in relation to the company and the fact that Joseph (Dr. Levit) has a founder's share which enables him to carry all the voting at any time". Clearly this was a reference to Mr. Bacon. The letter continued:

"... maybe we should change the articles or
get a letter of disclaimer from Joseph
relinquishing the founder share".

34. This was a very curious remark to make given the earlier correspondence, the preparation of a notice of relinquishment and its apparent execution by Dr. Levit some time in 1980.

35. By an agreement dated 24 November 1981 Dr. Levit, Dr. Pamela Levit and the Levit children agreed to sell their shares in Parktown Holdings to Double Doc Pty. Ltd. as trustee for the Levit Family Trust for the sum of $300 a share, $18,600 in all. Transfers of shares were executed but, it seems, were not registered. For stamp duty purposes, apparently in connection with the sale of assets of the company, the company was valued by the Commissioner for Stamp Duties at $481,832.

36. It is apparent from this correspondence and the steps that were taken in relation to Parktown Holdings Pty. Ltd. that Mr. Putnin knew a great deal more about Dr. Levit's interest in the company than his reported remarks at meetings of creditors would indicate. It is equally apparent that he failed to inform the meetings of what was taking place in regard to that interest. The applicants were not concerned to challenge the correspondence or, for the purposes of the present proceedings, the inferences sought to be drawn from it by the respondent. Their submission was that this material can have no relevance to the charges upon which they were committed for trial. They acknowledged that what took place regarding Dr. Levit's share may give rise to charges under the Bankruptcy Act or possibly charges of a wider nature. But, as they rightly pointed out, it is not for this Court to speculate about other charges that might be laid. This Court is concerned only with the question whether the evidence before the learned magistrate warranted the committal for trial of the applicants upon the charge for which each was committed. In particular, the applicants said, nothing that occurred in any of the meetings subsequent to the execution of the deed of arrangement constituted a decision by the creditors that the trustee take steps to effect a sale of Dr. Levit's share in Parktown Holdings, either upon a specified basis or at all. And, in their submission, in the absence of any such direction by the creditors, there was no obligation on Mr. Putnin to get in and realise the share and distribute the proceeds to the creditors. It followed that in law there could be no conspiracy to defraud the Commonwealth of Australia as a creditor by agreeing that Mr. Putnin would not get in and realise that share.

37. The applicants went further and said that in law there could be no subsequent decision by the creditors directing a sale of Dr. Levit's share. They pointed to the judgment of Paine J. in Re Clonan (1963) 20 ABC 245 at p 258 in which his Honour said that "an attempt by a confirmatory meeting to amend the original resolution for a scheme of arrangement ... was ultra vires the confirmatory meeting". In Re Boller (1964) 20 ABC 231 Negus J. commented at p 235:

"The allowing of creditors to give themselves
the power to vary the scheme is undesirable
for similar reasons, and I would add that in
my view, the phrase 'scheme of arrangement'
must mean a complete scheme embodying a
definite arrangement covering the period over
which it extends, even though it may not
entail a settlement or satisfaction".

38. Again, in Re Booth (1969) 15 FLR 249 at p 251, Gibbs J. (as he then was) said of the predecessor of Part X:

"... it may be said, first, that the creditors
had no power to vary, even by an extra-
ordinary resolution, a scheme binding upon
them under Part XI of the Bankruptcy Act".

39. The respondent's case was that, by the terms of the deed of arrangement, Mr. Putnin was bound to realise the assets shown in the statement of affairs and that, on the proper construction of the events that took place, the statement of affairs must be taken to include the schedule in which reference was made to Dr. Levit's interest in Parktown Holdings. Counsel submitted that the fact that the document filed by Mr. Putnin in the Bankruptcy Registry as the statement of affairs did not include the schedule cannot detract from the fact that when the creditors adopted a statement of the debtor's affairs, it was a statement that they understood included the share in Parktown Holdings. If this were not so, said counsel, there is no reason why the nature and extent of Dr. Levit's interest in the company should have been pursued at subsequent meetings. There was a suggestion on behalf of the applicants that the Commissioner of Taxation had an interest in the company and in the share that went beyond the debt the subject of the Part X proceedings. But there can be no doubt that the Commissioner's representative was concerned with the share for the purposes of the Part X proceedings as indeed was Mr. Court. The respondent argued that, on the proper construction of the deed, the share in Parktown Holdings was one of the assets that the trustee was obliged to realise. The alternative submission was that the debtor's interest in the share was assigned to the trustee by virtue of the deed (it being part of his interest in any real or personal property), thus obliging the trustee to hold the asset in trust subject to the further instructions of the creditors. It was the respondent's case that thereafter the applicants conspired to withhold information from the creditors, in particular by downgrading the value of Dr. Levit's share in Parktown Holdings and by agreeing that Mr. Putnin would not get in and realise the share.

40. The applicants' reply was as indicated above. They said that even if there was a concealment of the true value of the share or even a concealment of what was happening in regard to the share, there could be no conspiracy as charged unless there was some duty upon the trustee to get in and realise the share. If a decision in respect of the disposition of the share was simply deferred by the creditors, then quite apart from the creditors' inability in law to revive the matter, the fact is that they did not revive it. Even if their failure to do so was brought about by the conduct of Mr. Putnin, in conspiracy with the other applicants, there could be no offence of conspiring not to get in and realise the share. At most there might be an offence of conspiring to withhold information from the creditors or to mislead them.

41. The submission for the applicants that there could be no conspiracy by reason of any agreement not to get in and realise Dr. Levit's share in Parktown Holdings unless Mr. Putnin was under a duty to get in and realise the share is one that must be viewed with some caution for it tends to obscure the true nature of the prosecution case.

42. The case against the applicants is that Dr. Levit's share in Parktown Holdings vested in Mr. Putnin under the deed of arrangement for it was part of the debtor's interest in real and personal property and it was part of the property that the creditors resolved should be vested in the trustee. While the share was not mentioned in the document entitled "Statement of Affairs", it is apparent from what took place at the meeting on 6 February 1980 that the creditors intended the share to be included in their resolutions concerning the debtor's property. The case involves the further propositions that, on the proper construction of the resolutions, the share was to be vested in the trustee and that, on the proper construction of the deed, it was so vested. On the proper construction of the resolutions and the deed, it was the duty of the trustee to realise the share though a decision as to the price at which or the manner in which that realisation would be effected remained to be decided by the creditors on the basis of information to be furnished by the trustee. Such a decision, it is said, would not constitute a variation of the scheme entered into under Part X of the Act. Thereafter the conduct of the applicants amounted to an agreement that Mr. Putnin not get in and realise the share; to that end they attempted to persuade the creditors that the share was of no value.

43. The prosecution may or may not succceed in making good the case against the applicants. But it is not a case that depends upon establishing a duty upon the trustee, arising from the deed, to get in and realise the share without further instructions. Nor is it a case that presupposes an amendment to the deed or a variation of the scheme entered into. The learned magistrate gave careful and detailed consideration to the matters before him and, upon a review of the evidence, concluded that there was sufficient evidence upon which a reasonable jury, properly directed, might convict the applicants of the charge against them. It is unnecessary to refer to his worship's reasons for decision for, in the end, the question is whether the decision itself involved an error of law. In my view no such error has been demonstrated; in the matters to which I have referred, there is sufficient evidence upon which the applicants might be convicted of the charge. I should add that these matters are among the overt acts upon which the prosecution relies.

44. This conclusion makes it unnecessary to consider questions of discretionary relief such as were canvassed by the Full Court of this Court in Lamb v. Moss supra and more recently by Wilcox J. in Souter v. Webb (unreported decision delivered 11 July 1984). In Lamb v. Moss at p 564 the Court stressed the need for caution in interfering with committal proceedings and said:

"The power to make an order of review under
the Act in respect of committal proceedings
should be exercised only in most exceptional
cases, especially in respect of a decision in
the course of proceedings".

45. The Court recognised that "Additional considerations might intrude at the final stage; for example, in respect of committal for trial and commitment to prison pending trial" (at p.564). If I had doubts about the correctness of the magistrate's decision, it would be necessary to consider whether in any event the Court should decline to interfere with the decision, having regard not only to the interests of the prosecution but also those of the applicants in being put to the burden of a trial. But I am satisfied of the correctness of the decision so that those considerations do not arise.

46. It may be that more specific charges are available to the prosecutor; problems inherent in the use of conspiracy charges have been referred to by the courts on a number of occasions. See for instance R.v. Hoar [1931] HCA 30; (1981) 37 ALR 357; Gerakiteys v. R [1984] HCA 8; (1984) 51 ALR 417. But, in the ordinary course, I do not think it is appropriate for this Court, on an application for an order for review of a decision to commit, to suggest to the prosecution how it should proceed. The Court has a more limited role to fulfil.

47. Each application will be dismissed.