Austral Mining Construction Pty Ltd, Re [1991] QSCFC 5 [1993] 1 Qd R 358

] 10 50 P C- l<;o€ ! RE''-': it f t Coi^'i 'USUED ! sail IN THE SUPREME COURT OF QUEEN SL AN D FULL COURT BEFORE: O.S. No. 1207 of 1989 The Chief Justice (Mr. Justice Macrossan) Mr. Justice Derrington - Mr. Justice de Jersey BRISBANE, 22 FEBRUARY 1991 10 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold, without the written authority of the. Chief Court Reporter,Court Reporting Bureau.) IN THE MATTER OF the Rules of the Supreme Court o.64 rr.lB and 1BE -and- IN THE MATTER OF the Companies (Queensland) Code 1981 -and- IN THE MATTER OF Bill of Sale No. 86110 between BAUER SECURITIES PTY . LTD. and N.Z.I. CAPITAL CORPORATION LIMITED 2G BETWEEN: AUSTRAL MINING CONSTRUCTION PTY. LTD. Appellant (Applicant) -and- NZI CAPITAL CORPORATION LIMITED (Respondent) -and- SOGELEASE AUSTRALIA LIMITED JUDGMENT Respondent Respondent MR. JUSTICE DERRINGTON: I am authorised by The Chief Justice to say that in his view the appeal should be dismissed with costs. I publish his reasons. 50 60 Old. [1991] QSCFC 5 -- 1 of 27 -- I agree with his published views and with those of my brother de Jersey about to be published, and I publish my reasons. MR. JUSTICE de JERSEY: I also agree with, the reasons of my brother judges and the order proposed, and I publish my short reasons. MR. JUSTICE DERRINGTON: The order of the Court then is that the appeal is dismissed with costs. 2 -- 2 of 27 -- f'b IN THE FULL COURT OF QUEENSLAND FULL COURT O.S. 1207 OF 1989 IN THE MATTER of the Bills of. Sale and Other Instruments Act ... 1 955-1 987 and IN THE MATTER of the Companies (Queensland) Code 1981 and IN THE MATTER of Bill of Sale No. 860110 between BAUER SECURITIES PTY. LTD. and N.Z . I.CAPITAL CORPORATION LIMITED BETWEEN : AUSTRAL MINING CONSTRUCTION PTY.LTD. Appellant (Applicant) AND : NZI CAPITAL CORPORATION LIMITED Respondent (Respondent) AND : SOGELEASE AUSTRALIA LIMITED Respondent THE CHIEF JUSTICE DERRINGTON J de JERSEY J REASONS FOR JUDGMENT DELIVERED ON 2 2ND FEBRUARY, 1991 BY THE CHIEF JUSTICE, DERRINGTON J AND de JERSEY J. DERRINGTON J AGREEING WITH THE REASONS OF THE CHIEF JUSTICE AND de JERSEY J. de JERSEY J AGREEING WITH THE REASONS OF THE CHIEF JUSTICE AND DERRINGTON J. ALL CONCURRING AS TO THE ORDER. "APPEAL DISMISSED WITH COSTS. II -- 3 of 27 -- IN THE SUPREME COURT OF QUEENSLAND O.S. No. 1207 of 1989 Before the Full Court The Chief Justice Mr. Justice Derrington Mr. Justice de Jersey IN THE MATTER of the Bills of Sale and Other Instruments Act 1955-1987 -and- IN THE MATTER of the Companies (Queensland) Code 1981 -and - IN THE MATTER of Bill of Sale No. 86110 between BAUER SECURITIES PTY. LTD . AND N.Z.I. CAPITAL CORPORATION LIMITED BETWEEN : AUSTRAL MINING CONSTRUCTION PTY. LTD. Appellant ( Applicant ) AND : NZI CAPITAL CORPORATION LIMITED Respondent ( Respondent ) AND : SOGELEASE AUSTRALIA LIMITED Respondent JUDGMENT - THE CHIEF JUSTICE Delivered the twenty-first day of February, 1991 CATCHWORDS : Counsel: F.L. Harrison Q.C. and P. Wolfe for appellant. W. Sofronoff Q.C. and P. McMurdo for respondent. Solicitors: Anderson and Co. for appellant. Henderson Trout for respondent. 25 October, 1990 Hearing date: -- 4 of 27 -- IN THE SUPREME COURT OF QUEENSLAND O.S. No. 1207 of 1989 IN THE MATTER of the Bills of Sale and Other Instruments Act 1955-1987 -and- IN THE MATTER of the Companies (Queensland) Code 1981 -and - IN THE MATTER of Bill of Sale No. 86110 between BAUER SECURITIES PTY . LTD . AND N.Z.I. CAPITAL CORPORATION LIMITED BETWEEN : AUSTRAL MINING CONSTRUCTION PTY, LTD. Appellant ( Applicant ) AND: NZI CAPITAL CORPORATION LIMITED Respondent ( Respondent ) AND: SOGELEASE AUSTRALIA LIMITED Respondent JUDGMENT - THE CHIEF JUSTICE Delivered the twenty-first day of February, 1991 This appeal fails if the deed delivered to the respondent/lender in May, 1986 is a debenture. The attack upon its validity arose because it had not been registered as a Bill of Sale under the Bills of Sale and Other Instruments Act 1955-1989 (as it now is) and if by virtue of that Act it should have been registered, then its non-registration made it invalid for relevant purposes, that is, in the contest between the -- 5 of 27 -- 2 appellant and the respondent. However, because of the exclusion from the definition of "Bill of Sale" in s. 6(1) (g) of "debentures .., issued by ... any company" it would not require registration under, the legislation if it constituted such a "debenture" . The nature of the deed is described in the reasons which have been prepared by Derrington J. and by the judge of first instance. It was designed to secure advances which had been made and it contained a covenant by the company in question to repay advances and interest, giving security for its promise by assigning to the lender certain of the company's chattels subject to a right of redemption. I think that the decision of the judge below was clearly right when he held that the deed was a "debenture" within paragraph (g) of s. 6(1 ) of the Bills of Sale Act. The definition, the relevant portion of which I have already quoted, contains no hint that any specialised meaning is intended and so it directs us, primarily, to general concepts. It has frequently been remarked that the word "debenture" has no fixed and clear meaning and the nature of a debenture is described as satisfactorily as anywhere else in the judgments of Chitty J. in Levy v. Abercorris Slate & Slab Co . (1888) 37 Ch.D. 260 and Edmonds v. Blaina Furnaces Company (1887) 36 Ch.D. 215. Citing these and other cases, the High Court in Handevel Ptv. Ltd, v. Comptroller of Stamps (Viet) (1985) 157 C.L.R. 177 at 185, in the majority judgment, said that it had been "generally agreed" that two characteristics of a debenture are that it be issued by a company and that it should acknowledge or create a -- 6 of 27 -- 3 debt. Chitty J. in Edmonds v. Blaina Furnaces Company (supra) noted that the acknowledgement in a debenture was frequently accompanied by "some charge or security" but he did not suggest that it was an essential feature. In view of the observations by the High Court one would not consider it essential although it is certainly commonly the case that a debenture includes security beyond the effect of a mere acknowledgement of debt. Documents in certain precise categories are not usually described as debentures, e.g. a real estate mortgage and a negotiable instrument, even though they may be issued by a company and acknowledge a debt: see Handevel (supra) at 195. Chitty J., in the two cases referred to, saw no difficulty with the notion of a single debenture payable to one individual. There is no warrant in my view for the proposition that a document is excluded from the category of "debenture", if it otherwise meets the requirements, simply because it contains an assignment of chattels by way of security accompanied by an equity of redemption. None of the usages of the word "debenture" as described in the cases referred to would exclude such a document, nor would any other current usage to which attention might be directed. Indeed, in view of the remarks of Chitty J., one might be pardoned for thinking that this added feature would strengthen the document's entitlement to be called a debenture. Yet the argument for the appellant would have us accept this proposition, notwithstanding that there is no hint of any such idiosyncratic category of exclusion observable in the broad statutory reference to "debentures" . The statute is content to refer to a full range of what are fairly describable as -- 7 of 27 -- 4 debentures. The consequence is that by being included within the reference to "debentures" they are excluded from the definition of "Bill of Sale". The case on which most reliance was placed by the appellant to support what could be described as its bold proposition was Brocklehurst v. Railway Printing and Publishing Company, a decision of a single judge to be found in [1884] W.N. 70. If the case did unquestionably support the proposition for which it was advanced in argument here, I would be disposed to say that it is not a great deal to throw in the scales against what is shown to be a widely accepted current usage. Yet, I do not think it supports the submission. The decision in Brocklehurst (supra) seems to me to depend upon the approach taken by the judge in that case to the two kinds of document which were before him for consideration. He did not look at the totality of the features which, together, they possessed but, looking at each separately, he said that they did not possess all of the features necessary to satisfy the category of "debenture" referred to in the English Bills of Sale Act 1882. The category is narrower than the unqualified one which is found in the Queensland legislation in the terms already referred to. The relevant class of document which was excluded from the English Bills of Sale legislation was "debentures issued by any . . . company, and secured upon the capital, stock or goods, chattels, and effects of such company". In dealing with one of the documents which he had to consider the judge noted that it was simply in the form of an assignment of chattels to a named person as trustee for what were -- 8 of 27 -- 5 referred to as certain debenture holders. It does not appear to have acknowledged a debt and certainly no debt was owed by the company to the trustee. Without explanation, although understandably in view of this aspect, the judge said simply that the document was not a debenture. The other class of document which the judge in Brocklehurst had to consider consisted of a number of documents which were apparently called debentures but which were held not to be "debentures" as defined because they did not fall within the narrowed definition which required that they be "secured upon the ... chattels ... of ... (the) company". On their face they did not, themselves, create any charge on the property of the company in question. The words of the judge in deciding that they were excluded from the definition were that "they do not pass any property". He noted that they merely gave the benefit of the assignment which was effected by the first document. I fail to see how this case, decided upon a different and narrower statutory definition, can assist the appellant in the present case when the deed does, in fact, if the feature is needed, secure upon the chattels of the company the obligation which is undertaken. This is enough to dispose of the appeal and it is not necessary to express an opinion upon a further point which was decided below in favour of the appellant but not conceded by the respondent. Under s. 211 of the uniform Companies Code where notice in relation to a charge is or was required to be lodged with the Commission under the Code, or the legislation which preceded it, -- 9 of 27 -- 6 (notice of the charge contained in the deed of May, 1986 was so required and was in fact lodged) the charge, by sub-section (1)(a ) is not in additipn required to be registered under the provisions of the Bills of Sale legislation; a failure to register the charge under that legislation does not, by sub-section (1)(c), affect the validity of the charge and, by sub-section (2), when the assignment is registered under the relevant provisions of the Companies Code (this in fact occurred) the assignment is declared to be "as valid and effectual as if . ( )it had been duly registered" under the Bills of Sale legislation. The judge below, giving what might thought to be a somewhat restricted application to "duly" in the words I have last quoted ( ) held that the various provisions of the Companies Code would not have saved the validity of the assignment in the deed if it, considered as a debenture, had not been relieved from the necessity of registration by the terms of the Bill of Sale legislation itself. The contrary argument on this aspect is, that if the Bill of Sale legislation, separately considered, ^ ) required registration as a condition of validity and would not, even with registration, have saved this deed because of its ^ ^ non-conformity with the detailed requirements of s. 19, then it would have been saved by the sufficiently indicated intention of the draftsman of the Companies Code and the effect which should be attributed to the separate provisions of s. 211 to which I have already referred, taking into account the underlying plan to provide a self-sufficient code of validity for registered company charges. Upon this question I refrain from expressing -- 10 of 27 -- 7 an opinion. In view of my conclusion* it is unnecessary to do so. I would dismiss the appeal with costs -- 11 of 27 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT O.S. No. 1207 of 1989 Before the Full Court The Chief Justice Mr. Justice Derrington Mr. Justice de Jersey IN THE MATTER of The Rules of the Supreme Court 0. 64 rr. 1B and 1 BE - and - IN THE MATTER of the Bills of Sale and Other Instruments Act 1955-1987 - and - IN THE MATTER of Bill of Sale No/ 86110 between BAUER SECURITIES PTY. LTD, and N .Z . I . CAPITAL CORPORATION LIMITED BETWEEN: AND: AND: AUSTRAL MINING CONSTRUCTION PTY. LTD. Appellant ( Applicant ) N.Z.I. CAPITAL CORPORATION LIMITED Respondent ( Respondent ) SOGELEASE AUSTRALIA LIMITED Respondent JUDGMENT - DERRINGTON J. Delivered the 22nd day of February, 1991 CATCHWORDS : Debenture - Whether includes promise to pay associated with old system mortgage of secured property Counsel: F.L. Harrison Q.C. with P. Wolfe for appellant W. Sofronoff Q.C. with P. McMurdo for respondent Solicitors: Anderssen and Company for appellant Henderson Trout for respondent Hearing date: 25th October, 1990 -- 12 of 27 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT O.S. No. 1207 of 1989 IN THE MATTER of The Rules of the Supreme Court 0. 64 rr. 1B and 1BE - and - IN THE MATTER of the Bills of Sale and Other Instruments Act 1955-1987 - and - IN THE MATTER 1 of Bill of Sale No. 86110 between BAUER SECURITIES PTY. LTD, and N.Z.I. CAPITAL CORPORATION’ LIMITED BETWEEN : AUSTRAL MINING CONSTRUCTION PTY. LTD. Appellant ( Applicant ) AND: N.Z.I. CAPITAL CORPORATION LIMITED Respondent ( Respondent ) AND: SOGELEASE AUSTRALIA LIMITED Respondent JUDGMENT - DERRINGTON J. Delivered the 22nd day of February, 1991 In consideration of loans made by N.Z.I. Capital Corporation Limited ("the lender") to other companies, Bauer Securities Pty. Ltd. ("the company") entered into a deed in which it covenanted to repay to the lender the principal sum and interest and by way -- 13 of 27 -- 2 of security assigned certain chattels to it, subject to an equity of redemption. Although particulars of the charge conferred by the deed were lodged in the Office of the Commissioner for Corporate Affairs and entered in the appropriate register of company charges pursuant to s. 203 of the Companies (Queensland) Code ("the Code") and a certificate of such registration was issued by the Commission under s. 210 of the Code, the document was not registered under the provisions of the Bills of Sale and Other Instruments Act 1955-1981 ("the Act"). Although it was in due form for registration under the Code, there were certain technical defects which would have prevented its due registration as a Bill of Sale under the Act. The only question here is whether the security purported to be given by the deed fails as against a purchaser of the property because the document was not registered and could not be duly registered under the Act. In the answer to this the first issue is whether the document is a "debenture". This is because s. 19 of the Act, which ties the validity of securities of this general nature to registration under the Act, requires only instruments to be so registered and "instrument" is defined in s. 6(1) to mean, inter alia, "Bills of Sale". This in turn is defined to include an instrument generally descriptive of the relevant document here, but the definition contains various exclusions. One of these is ; - "(g) debentures and interest coupons issued by any Government, and Crown corporation or instrumentality or corporation or instrumentality representing the Crown, or any local authority, or any company or other corporate body;" -- 14 of 27 -- 3 In summary, if the document is a debenture within the meaning of that expression in the exception to the definition of Bills of Sale, then it does not require registration as an instrument under the Act and the lender's security is preserved. As Gibbs C.J. said in Handevel Pty. Ltd, v. Comptroller of Stamps (Viet.) (1985) 157 C.L.R. 177 at p. 185: "it has been said again and again that the word 'debenture' has no precise meaning: see the cases cited in Kniqhtsbridqe Estates Trust Ltd, v. Byrne (1940) A . C. 613 at pp. 621-622". In that case, the High Court discussed the meaning of the word in the context of revenue legislation charging duty on every mortgage, bond, debenture or covenant. The question was whether duty was exigible upon a document which was a simple mortgage of land by a company to a trustee to secure the payment of moneys in the event of its failure to perform its obligations under a trust deed and certain share issue agreements, all of which were evidenced by documents which were distinct from the document in dispute. In order to understand properly the remarks of the High Court, it must be appreciated that the document in question did not contain a promise to pay the money but was simply a mortgage to a trustee to secure the payment of the future purchase money which was promised in a transaction evidenced in another of the documents. It will also assist to know that the majority of the High Court found that neither the deed promising to pay the purchase money nor the mortgage securing that payment was a debenture because the agreement to make a payment of purchase money and the provision by way of security for the payment of the -- 15 of 27 -- 4 purchase price do not in either case make provision for the repayment of a loan. Although he dissented from the result for other reasons, Gibbs C.J. appears to have been ad idem with the majority of the Court when he also said: "It may nevertheless be assumed that a single mortgage, or an agreement to give such a mortgage, would not be a debenture within the ordinary meaning of that term: see Knightsbridqe Estates Trust Ltd, v. Byrne (supra) at p. 620." (It may be that the word "single" is a misprint for "simple".) The reason of course is that a simple mortgage for the repayment of money does not constitute a promise by the company to make that payment, for such a promise may be made elsewhere and the mortgage may exist independently simply to secure the performance of that promise, which is a totally different function from the promise itself. At p. 195, the majority of the Court (Mason J. (as he then was), Wilson, Deane and Dawson JJ.), after acknowledging the authority confessing that the term "debenture" defies accurate description, said:- "However, it has been generally agreed that two characteristics of a debenture are, first, that it is issued by a company and, secondly, that it acknowledges or creates a debt: see British India Steam Navigation Co.; Edmonds v. Blaina Furnaces Co. (1887) 36 Ch. D. 215; Levy v. Abercorris Slate and Slab Co. (1988) 37 Ch. D. 260 at p. 264; Topham v . Greenside Glazed Fire-Brick Co. (1888) 37 Ch. D. 281 at p. 292; Broad v. Commissioner of Stamp Duties (1980) 2 N. S.W.L.R. 40 at pp. 48-52. The debt may be secured on the assets of the company but security in this sense is not an essential characteristic of a debenture: Blaina Furnaces (supra) at p. 219. In Burns Philp Trustee Co. Ltd, v. Commissioner of Stamp Duties ( N-. S. W . ) (1983) 14 A.T.R. at p. 484; 83 A.T.C. at p. 4, 479 Hunt J. stated that, in order to constitute a debenture the debt which is acknowledged or created must be an existing, not a future debt. -- 16 of 27 -- 5 His Honour's view is supported by authority: Lemon v . Austin Friars Investment Trust: R. v. Findlater (1939) 1 K.B. 594 at p. 599. However, the statement needs to be qualified to allow for a document which makes provision for the repayment of a loan to be made thereafter. On the other hand, not every document creating or acknowledging a debt of a company is a debenture.. It has been said that commercial men and lawyers would not use the term when referring to negotiable instruments, deeds of covenant and many other documents in which a company agrees to pay a sum of money: Palmers Company Law (1982) vol. 1 p. 531. And it has never been suggested that a promise in writing by a company to purchase shares at a future date amount to a debenture in the ordinary sense of the term: cf. Inland Revenue Commissioners v. Henry Ansbacher & Co. (1963) A.C. 191 at p. 205. Nor has it ever been suggested that a specific mortgage of land to secure a future obligation to purchase property amount to a debenture according to its ordinary meaning: Knightsbridge Estates Trust (supra)." It will not be surprising that none of the members of the Court regarded the relevant deed constituted a debenture. The Court was divided as to whether it came within the meaning of "security", but that is irrelevant to the present question. On the relevant issue however, this case is of limited assistance. Similarly in Knightsbridge Estates Trust Ltd, v. Byrne (supra) the discussion was directed to the question whether a mortgage of freehold properties by a company to secure a loan was a debenture for if it were, then a clog on the equity of redemption in the form of a long postponement would not have the usual effect of invalidating such a clog. The result was decided upon the special features of the relevant statute's definition of debenture, which does not concern the issues here, but at p. 620 of the report, Viscount Maugham said that whatever be the ambit of the word, it did not in the section under consideration include an ordinary mortgage of land. This bare statement is of little assistance for upon the same reasoning as that of the High -- 17 of 27 -- 6 Court in Handevel it probably means that a debenture must contain a promise to pay so that an ordinary mortgage which contains no such promise but merely provides security for the performance of such a promise, which is made elsewhere, lacks that element. At p. 621, he cited without disapproval the words of Chitty J. in Lew v. Abercorris Slate & Slab Co. (supra) that debenture "means a document which either creates a debt or acknowledges it, and any document which fulfils either of these conditions is a debenture" . In this lastmentioned case at p. 264, the full context of the remarks of Chitty J. was as follows "I have myself known an instance of a single debenture payable to one individual. In my opinion a debenture means a document which either creates a debt or acknowledges it, and any document which fulfils either of these conditions is a 'debenture'. I cannot find any precise legal definition of the term, it is not either in law or commerce a strictly technical term, or what is called a term of art. It must be 'issued' , but 'issued' is not a technical term, it is a mercantile term well understood; 'issue' here means the delivery over by the company to the person who has the charge; as to what 'company' means I have already said it must be by 'an incorporated company1 , and it must be secured on 'the goods, chattels and effects' of the company. Having thus gone through the section once again, I find I cannot add anything further on this point to what I have already stated in the case of Edmonds v. Blaina Furnaces Company ." In Edmonds v. Blaina Furnaces Company (supra) at p. 221, he had said:- "I have seen debentures of various kinds and classes, and it is a mistake to say that to be debentures the instruments must be issued and numbered seriatim. I have even seen a single debenture issued to one man. There is nothing in the section requiring that more than one instrument should be issued. In this case the security is given to each one so that each shares pari passu with the other. No doubt as a rule the instruments called debentures are issued so that each person gets his own document and can deal with it separately. He has greater facility of dealing with -- 18 of 27 -- 7 it in the market than is afforded by this instrument, but it would be unreasonable to hold that because the obligation to pay and the security in favour of several persons is contained in one single document, therefore the instrument is not within the protection of the section. There would not be any principle in doing that. I do not see why a single debenture should not be given to half-a-dozen persons and still be a good debenture within the Act. In my opinion, therefore, this is a valid instrument." In Levy., he considered the question of a security granted by the debenture and, applying Ross v. Army and Navy Hotel Company (1887) 34 Ch. D. 43, found that an agreement in the debenture to grant a mortgage of the company ' s property was a charge in equity, that is, an equitable mortgage, and so the debenture came within the provisions of s. 17 of the English Bills of Sale Act 1882 which excluded "any debentures issued by any ... company and secured upon the capital stock, or goods, chattels, and effects of such company" . It was clearly necessary that the debenture should provide a security, not in order to qualify as a debenture, but in order to come within the description of the section which referred only to debentures providing such a security. However, it seems to be inherent in the discussion (a) that a document containing a promise by a company to pay or repay money associated with the giving of a security is no less a debenture for the inclusion of the latter; (b) that it is immaterial whether such a charge consists of a mortgage of property as distinct from any other type of charge; and (c) that historically the legislature's intention at that time was to exempt from the Bills of Sale Act a debenture which was secured over the property of a company. There would have been no point in referring to a debenture which did not have such a security, -- 19 of 27 -- 8 for it would hardly have come within the provisions of. the Act. This is recognised by the limitation of the exemption to debentures associated with such a security. The appellant; who claims that the document is not a debenture, places great reliance upon Brocklehurst v. Railway Printing and Publishing Company (1884) W.N. 70 in which the exemption under s. 1 7 of the Bills of Sale Act was again invoked. There were two sets of documents, the first consisting of fifteen debentures in each of which the company undertook to pay the bearer a sum of money subject to the conditions endorsed thereon, one of which conditions entitled each holder pari passu to the benefit of an indenture. That indenture constituted the second class of documents and was an assignment by the company of its property to a trustee for the debenture holders. Although it was registered under the Bills of Sale Act, it was defective in form and did not have the benefit of such registration. The appellant stresses the finding in this authority that the latter instrument was not a debenture. Although the judgment does not explain why this is so, it is obviously because as in other cases analysed above that instrument was no more than a simple assignment by way of mortgage as security for promises contained in the other documents; and because no promises of repayment were made in it by the company, it was not a debenture: cf. Handevel Pty. Ltd, v. Comptroller of Stamps (supra). The judgment in Brocklehurst then goes on to consider the first class of document. It says:- "Probably the reason that the debentures here described are excluded is because they do not pass any property. Certainly the debentures in this case do not, whatever may be the case when they are in the -- 20 of 27 -- 9 ordinary form. What the debentures in this case give is the benefit of an assignment ... By the instrument, the holder is only to be entitled pari passu with the fourteen other holders, that is, each one is not entitled to the whole of the property, but only to come in with the others and take his share of whatever passes by the assignment. As far as I can judge, this debenture passes no property whatever in the goods. All that (the debenture holder) has is the right to come in and take the benefit of a sale of these goods by (the trustee) who, as between grantor and grantee, is the owner of them under the assignment to him." A number of matters are clearly expressed in this passage. First, the documents in this class were debentures and were so called in the judgment because they contained a promise by the company to repay the loan advanced by the debenture holder. Secondly, as in Levy the question as to whether security was given by the debenture was relevant only because s. 17 of the Act required both that the document be a debenture and that it provide security over property. Thirdly, the debenture itself did not provide the security by the assignment of the property: that was effected under the separate indenture. Fourthly, "debentures ... in the ordinary form" to which this passage refers is explained in the earlier passage of the judgment as follows "Then what is a debenture within the meaning of this section? The ordinary form is one by which a company undertakes to pay the holder a sum of money, and says that that shall be a charge on the company's property. It is difficult to say exactly what it is a charge upon. It cannot be intended to pass all the specific articles of property of the company to each debenture holder. I think that all that such a debenture gives is not a right to any specific property, but a right to come in pari passu with the other debenture holders ... and to claim the benefit of the security." Fifthly, this latter passage, upon which the appellant also relied, was not describing every debenture but rather an ordinary V -- 21 of 27 -- 10 debenture which also came within the meaning of s. 17, that is, one which was not only a debenture but which also gave a security. In describing the ordinary type of debenture which met these criteria, it referred to the common situation where there are a number of debenture holders, so that the type of charge employed cannot be a full mortgage of the property to each. This is because, as the first mortgage involves the transfer of title to the property, there could be only one and not a number of full mortgages of the property itself. After the first mortgage each mortgagee would hold his security successively in the diminishing equity of redemption and there would not be parity. Equality is achieved by the method adopted, and that is the reason for the difference. Where there is only one debenture holder, there is no reason why there should not be a simple mortgage to support it, and that does not affect its quality in any way. Sixthly, the discussion on the last point does not imply that a mortgage of the property is alien to the nature of a debenture for, as Chitty J. has said in the passages cited above, a debenture may be granted to a single person, which admits of the grant of the mortgage. The discussion in Brocklehurst was directed only at one type of situation and did not intend to be exclusive.' If it had done so, it was wrong and has been impliedly overruled in that respect by later authority. Indeed, in many of the cases, the security given was an assignment by way of mortgage, and nowhere is it suggested that the document was any less a debenture because the security took this form. All that has been said is that if the document contains nothing other -- 22 of 27 -- 11 than a mortgage without the other criteria of a debenture, then it is not a debenture. That has been explained above. This was the only point relied upon by the appellant, and it fails because it relies upon misconstruction of what was said in Brocklehurst. There is nothing in the history of the legislation which would advance the matter further so that the appellant fails completely on this issue which therefore determines the appeal. Accordingly it is unnecessary to embark upon a discussion of a second point, which was raised by the respondent, namely, that the consequence of registration of the document under the Code is that by virtue of s. 211(2) of the Code the transaction is as effective as if the document were in due form and was duly registered under the Act. The appeal should be dismissed with costs. Having lately read the reasons of de Jersey J., also wish to express my agreement with his comments. I should -- 23 of 27 -- IN THE SUPREME COURT OF QUEENSLAND Before the Full Court The Chief Justice Mr. Justice Derrington Mr. Justice de Jersey O.S. No. 1207 of 1989 IN THE MATTER of The Rules of the Supreme Court O. 64 rrlB and 1 BE - and - IN THE MATTER of the Bills of Sale and Other Instruments Act 1955-1987 - and - IN THE MATTER of the Companies (Queensland) Code 1981 - and - IN THE MATTER of Bill of Sale No. 86110 between BAUER SECURITIES PTY. LTD, and N.Z.I. CAPITAL CORPORATION LIMITED BETWEEN: AND: AND: AUSTRAL MINING CONSTRUCTION PTY. LTD. Appellant ( Applicant ) NZI CAPITAL CORPORATION LIMITED Respondent ( Respondent ) SOGELEASE AUSTRALIA LIMITED Respondent JUDGMENT - de JERSEY J. Delivered the 22nd day of February, 1991 Counsel: F.L. Harrison Q.C. with him P. Wolfe for appellant W. Sofronoff Q.C. with him P. McMurdo for respondent Solicitors: Anderson and Co for appellant Henderson Trout for respondent Hearing date: 25th October, 1990 -- 24 of 27 -- IN THE SUPREME COURT OF QUEENSLAND O.S. No. 1207 of 1989 IN THE MATTER of The Rules of the Supreme Court 0. 64 rrlB and 1BE - and - IN THE MATTER of the Bills of Sale and Other Instruments Act 1955- 1987 - and - IN THE MATTER of the Companies (Queensland) Code 1981 - and - IN THE MATTER of Bill of Sale No. 8611 0 between BAUER SECURITIES PTY. LTD, and N.Z.I. CAPITAL CORPORATION LIMITED BETWEEN: AUSTRAL MINING CONSTRUCTION PTY. LTD. Appellant ( Applicant) AND: NZI CAPITAL CORPORATION LIMITED Respondent (Respondent ) AND: SOGELEASE AUSTRALIA LIMITED Respondent JUDGMENT - de JERSEY J. Delivered the 22nd day of February, 1991 The short issue on this appeal is whether a bill of sale by way of assignment of chattels with a proviso for redemption, to secure a sum of money, is a "debenture" within para, (g) of -- 25 of 27 -- 2 s. 6(1) of the Bills of Sale and Other Instruments Act 1955-1987. Mr. Harrison Q.C., who appeared for the appellant, submitted that such a bill of sale, which resembles an "old system" mortgage, could not be a debenture . For the reasons given by the Chief Justice and Derrington J., I agree with them, and the learned Judge at first instance, that this deed did constitute a debenture. The case of Brocklehurst v. Railway Printing and Publishing Company (1884) W.N. 70, on which Mr. Harrison mainly relied, is not determinative of the matter in his favour, for the reasons given by my brothers. This deed, which confers security on company property, has the characteristics of a debenture referred to by Mason, Deane, Dawson and Wilson JJ. in Handevel Ptv. Ltd, v. Comptroller of Stamps (Vic.) (1985) 157 C.L.R. 177 - that it is issued by a company, and that it acknowledges or creates a debt. Unless one engrafts some further limitation onto what may constitute a debenture as explained by Chitty J. in Edmonds v. Blaina Furnaces Company (1887) 36 Ch.D. 215, 221 and Levy v. Abercorris Slate and Slab Company (1887) 37 Ch.D. 260, 264, then this deed does amount to a debenture. Should one then exclude, from the category of "debenture" under this legislation, a deed which creates an "old system" mortgage? There is no statutory or other authority which would warrant limiting the scope of "debenture" under this legislation by reference to the form of security granted. There would be no justification for distinguishing between instruments which contain a legal mortgage, and those which contain a charge or -- 26 of 27 -- 3 other security. I see no reason to depart from Chitty J's description of what ordinarily amounts to a debenture, especially in view of Handevel . In my opinion the appeal should be dismissed with costs . -- 27 of 27 --