Brown v Mikulski

[2016] FCA 1037

FEDERAL COURT OF AUSTRALIA

Brown v Mikulski [2016] FCA 1037

Appeal from:

Brown v Mikulski & Anor [2016] FCCA 683

File number:

NSD 825 of 2016

Judge:

GLEESON J

Date of judgment:

1 September 2016

Catchwords:

BANKRUPTCY AND INSOLVENCY – transfer of property prior to bankruptcy – appeal from a judgment of the Federal Circuit Court of Australia declaring that the transfer of a property is void as against the first respondent – consideration of s 121 of the Bankruptcy Act 1966 (Cth) –appeal allowed

Legislation:

Bankruptcy Act 1966 (Cth)

Cases cited:

Sandell v Porter (1966) 115 CLR 666

Swinburne v David Syme & Co [1909] VLR 550; (1909) 15 ALR 579

Woolworths Ltd v Director of Liquor Licensing [2012] WASC 384

Date of hearing:

10 August 2016

Registry:

New South Wales

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Category:

Catchwords

Number of paragraphs:

53

Counsel for the Appellant:

Mr BJ Skinner

Solicitor for the Appellant:

Sullivans Solicitors

Counsel for the Respondent:

Mr RD Marshall with Mr EA Walker

Solicitor for the Respondent:

Roberts Legal

ORDERS

NSD 825 of 2016

BETWEEN:

DEAN SCOTT BROWN

Appellant

AND:

BENJAMIN NORMAN MIKULSKI

Respondent

JUDGE:	GLEESON J
DATE OF ORDER:	1 SEPTEMBER 2016

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The orders of the Federal Circuit Court made on 13 May 2016 are set aside.

3.The respondent pay the appellant’s costs of the appeal.

4.The respondent is entitled to be indemnified out of the bankrupt estate of Angela Flora Moutinho-Brown for his costs of the appeal on a solicitor client basis.

5.Liberty to apply within seven days for any further orders required to give effect to the judgment delivered today.

THE COURT DECLARES THAT:

6.The transfer of the interest of the bankrupt in the property known as 7/9-9A Gannon Avenue, Dolls Point, New South Wales, being Folio Identifier 7/33255, to the appellant on 30 May 2012 is not void against the respondent.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GLEESON J:

1. The appellant (“Mr Brown”) appeals from a decision of a judge of the Federal Circuit Court of Australia (“FCCA”) making orders concerning the property known as 7/9-9A Gannon Avenue, Dolls Point, New South Wales (“property”): Brown v Mikulski & Anor [2016] FCCA 683.

2. In particular, the FCCA judge declared that the transfer of the property from Ms Angela Flora Moutinho-Brown (“bankrupt”) to Mr Brown on or about 30 May 2012 is void against the first respondent (“trustee in bankruptcy”).

3. In summary, the FCCA judge found that the transfer of the property was void pursuant to s 121 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”).

4. Section 121 provides, relevantly:

   Transfers to defeat creditors

   Transfers that are void

   (1)A transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee) is void against the trustee in the transferor’s bankruptcy if:

   (a)the…