Barnden as trustee of the Bankrupt Estate of Stein v Stein

This matter concerned an application by the trustee of the bankrupt estate of Mr Stein for an order that certain property, namely a property at 14 Willow Creek Road, Dural, NSW, be vested in the trustee. The trustee sought this order pursuant to section 121 of the *Bankruptcy Act 1966* (Cth) (the Act), alleging that Mr Stein had transferred the property to his wife, Ms Stein, for no consideration, with the intention of defeating his creditors. The application was heard in the Federal Court of Australia.

The primary legal issue before the Court was whether the transfer of the property from Mr Stein to Ms Stein was voidable under section 121 of the Act. This required the Court to determine whether the transfer was made for the purpose of preventing the property from becoming divisible among Mr Stein's creditors or hindering or delaying the enforcement of any of his creditors' rights. The Court also considered whether Ms Stein had provided any consideration for the transfer, and if so, whether that consideration was adequate.

In reaching its decision, the Court analysed the evidence presented regarding the circumstances of the transfer. It was noted that the transfer occurred shortly before Mr Stein's bankruptcy. The Court found that there was no evidence of any consideration being paid by Ms Stein for the property, and that the transfer was made without consideration. Crucially, the Court concluded that the dominant purpose of Mr Stein in transferring the property was to defeat his creditors. Accordingly, the Court found that the conditions of section 121(1) of the Act were satisfied.

The Court ordered that the property at 14 Willow Creek Road, Dural, NSW, be vested in the applicant, Barnden as trustee of the Bankrupt Estate of Stein.