Chen v Marcolongo

The case of *Chen v Marcolongo* involved an appeal to the New South Wales Court of Appeal concerning a fiduciary's use of a power of attorney to sell property to himself and a claim under section 37A of the *Conveyancing Act 1919* (NSW) to declare a conveyance void due to an alleged intent to defraud creditors. The primary dispute revolved around the validity of a conveyance of units and the standing of a party to bring proceedings under section 37A.

The court was required to determine whether a conveyance, where a fiduciary used a power of attorney to sell property to himself, should be set aside. Additionally, the court had to consider whether a person with a claim for unliquidated damages in tort, pending in the District Court, qualified as a "creditor" for the purposes of section 37A of the *Conveyancing Act*, and whether such a person had standing to seek a declaration that a conveyance was void due to an intent to defraud creditors. The court also considered whether dishonesty was a necessary element to establish an intent to defraud under section 37A.

The Court of Appeal allowed the appeal in part, setting aside certain declarations and orders made in favour of the first respondent, Mrs Marcolongo. The court reasoned that the first respondent lacked the necessary standing to bring proceedings under section 37A of the *Conveyancing Act* as her claim for unliquidated damages did not render her a "creditor" in the context of that section. The court also varied other orders, including those relating to the conveyance of units and the discharge of a mortgage, and made consequential orders regarding costs.