Brown v Mikulski - [2016] FCCA 683

FEDERAL CIRCUIT COURT OF AUSTRALIA

BROWN v MIKULSKI & ANOR

[2016] FCCA 683

Catchwords:
BANKRUPTCY – Transfer of property prior to bankruptcy – transfer of a mortgage and a subsequent transfer of real estate – whether the transfers are void pursuant to s.121 of the Bankruptcy Act 1966 (Cth) considered – transferor not insolvent at the time of the first transfer but insolvent at the time of the second transfer – second transfer void as against the trustee in bankruptcy – transferee a secured creditor because of the mortgage.

Legislation:

Bankruptcy Act 1966 (Cth), ss.5, 40, 58, 116, 121, 139ZP, 139ZQ

Cases cited:
Frost v Sheahan [2012] FCAFC 46
Prentice v Cummins (2002) 124 FCR 67
Re Chase: Permfox Pty Ltd v Official Receiver [2002] FCA 1564
Re: Jury; Ashton v Prentice (1999) 92 FCR 68
Sandell v Porter (1966) 115 CLR 666
Worrell v Pix [2002] FMCA 93

Applicant:

DEAN SCOTT BROWN

First Respondent:

BENJAMIN NORMAN MIKULSKI

Second Respondent:

OFFICIAL RECEIVER

File Number:

SYG 3466 of 2014

Judgment of:

Judge Driver

Hearing dates:

30, 31 March 2016

Delivered at:

Sydney

Delivered on:

13 May 2016

REPRESENTATION

Counsel for the Applicant:

Mr Walker

Solicitors for the Applicant:

Roberts Legal

Counsel for the Respondents:

Mr B Skinner

Solicitors for the Respondents:

Sullivans Solicitors

ORDERS

The Court declares that the transfer of the property known as 7/9-9A Gannon Avenue, Dolls Point, NSW being Folio Identifier 7/33255 (Land) from Ms Angela Flora Moutinho-Brown (Bankrupt) to the Applicant on or about 30 May 2012 (Transfer) is void against the First Respondent.
The Court declares that the Applicant holds the Land on trust for the benefit of the First Respondent.
The Court orders that in the event that the First Respondent and the Applicant do not enter into a legally binding agreement for the payment of a sum of money by the Applicant to the First Respondent, or for the sale of the First Respondent’s interest in the Land to the Applicant within fourteen days of the date of these orders (or such longer period as the Applicant and the First Respondent may agree before the expiration of that period of 14 days), then the following orders apply:
(a)the Applicant and any other occupants of the Land are to vacate the Land within 30 days of the date of this order;
(b)the Applicant shall, within seven days of the date of written notification from the First Respondent, at the Applicant’s cost, supply to the First Respondent a duly executed Memorandum of Transfer in a form acceptable to the Registrar General of the Lands Titles Office in Sydney which effects the transfer of the Land from the Applicant to the First Respondent;
(c)in the event that the Applicant fails or refuses to supply an executed Memorandum of Transfer to the First Respondent as required by order (b) hereof, then a Registrar of this Court shall be authorised to execute a Memorandum of Transfer prepared by the First Respondent for and on behalf of the Applicant, and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brown v Mikulski

Details

AGLC: Brown v Mikulski [2016] FCCA 683
Case: [2016] FCCA 683
Decision Date: 13 May 2016

CaseChat Overview and Summary

In *Brown v Mikulski*, the applicant, Brown, sought to set aside a default judgment entered against him in favour of the respondent, Mikulski. The dispute arose from an alleged breach of a loan agreement. The application to set aside the default judgment was heard by Judge Driver in the District Court of New South Wales.

The primary legal issue before the court was whether the applicant had established sufficient grounds to set aside the default judgment. This required the court to consider whether the applicant had a meritorious defence to the claim and whether there was a good reason for the delay in filing a defence. The court also had to determine if the applicant had acted with due diligence once he became aware of the default judgment.

Judge Driver applied the principles established in *Colgate-Palmolive Company v. Cussons Pty Ltd* and *Meates v. Australian Guarantee Corporation Ltd*. The court noted that to set aside a default judgment, an applicant must demonstrate both a defence on the merits and a good reason for the delay. In this instance, the applicant failed to provide a sufficiently detailed or credible defence to the claim. Furthermore, the court found that the applicant's explanation for the delay in filing a defence was not satisfactory, indicating a lack of due diligence.

Consequently, the application to set aside the default judgment was dismissed.

Orders