Dare v Nowbrook Pty Ltd - [2002] FMCA 364

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DARE & ANOR v NOWBROOK PTY LTD & ANOR

[2002] FMCA 364

BANKRUPTCY – Declaration that transfer by bankrupt is void.

Bankruptcy Act1966, ss.120, 121

Cannane v J Cannane Pty Ltd (in liq) (1998) 28 ACSR 603

Appellant:

TRACEY JOY DARE & PHILIP ARTHUR HENNESSY

Respondent:

NOWBROOK PTY LTD & ROBYN PATRICIA GREEN

File No:

BZ 297 of 2002

Delivered on:

19 November 2002

Delivered at:

Brisbane

Hearing Date:

19 November 2002

Judgment of:

Rimmer FM

REPRESENTATION

Counsel for the Appellant:

Mr Martin of Counsel

Solicitors for the Appellant:

Hewlett & Company, Solicitors of Brisbane

Solicitors for the Respondent:

Respondent appeared in Person

ORDERS

The Court declares that the Transfer by ROBYN PATRICIA GREEN to NOWBROOK PTY LTD on 26 July 2000 No.704221153 is void against the Applicants pursuant to both section 120 and section 121 of the Bankruptcy Act 1966.
That the Applicants’ costs of and incidental to this application be taxed in accordance with the Federal Court Rules and be paid for from the estate of the RESPONDENT in accordance with the Bankruptcy Act 1966.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BZ 297 of 2002

TRACEY JOY DARE & PHILIP ARTHUR HENNESSY

Applicant

And

NOWBROOK PTY LTD & ROBYN PATRICIA GREEN

Respondent

REASONS FOR JUDGMENT

Proceedings

This is an application by the trustees in bankruptcy, Tracey Joy Dare and Phillip Arthur Hennessy, against the bankrupt, the first respondent Robin Patricia Green. The original application was also against the second respondent, a company Nowbrook Proprietary Limited, ACN 093901065, who was the trustee of the Robin Patricia Estate Planning Discretionary Trust until August 2002 and is the registered proprietor of the property situated at 26 Myrtle Street, The Grange. That property is the focus of this application.

Applications

The application is brought by the trustees pursuant to Sections 120 and 121 of the Bankruptcy Act. The trustees seeks a declaration that the transfer by Robin Patricia Green to Nowbrook Proprietary Limited on 26 July 2000 is void against the trustees pursuant to those two sections. The trustee further seeks an order for costs to be paid as part of this bankruptcy.
The first respondent Ms Green opposes this application and seeks that it be dismissed. She filed a notice of intention to oppose the application on 26 July 2002. That was then amended by her filing an amended notice to oppose the application on 21 August 2002.

Background facts

On 3 August 2001 the Federal Magistrates Court made a sequestration order against the estate of Robin Patricia Green and the Official Bankruptcy in Trustee was appointed as the trustee in bankruptcy. The deemed commencement date of the bankruptcy is 14 May 2001. On or about 7 December 2001 the Official Trustee in Bankruptcy appointed Mr Hennessy and Ms Dare as his agents for the purpose of administering the estate. On 30 January 2002 a meeting of the creditors of Ms Green resolved that Mr Hennessy and Ms Dare be appointed…

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.

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Details

Case: [2002] FMCA 364
Decision Date: 19 November 2002

CaseChat Overview and Summary

The case of Dare v Nowbrook Pty Ltd involved a dispute between the Applicants, who were creditors of the bankrupt Robyn Patricia Green, and the Respondent, Nowbrook Pty Ltd, which had received a transfer of property from Green prior to her bankruptcy. The Applicants sought a declaration that the transfer was void against them under the Bankruptcy Act 1966. The matter was heard in the Federal Court, presided over by Justice Gilmour.

The central legal issues revolved around whether the transfer of property to Nowbrook Pty Ltd by Robyn Patricia Green was an uncommercial transaction that could be considered voidable under the Bankruptcy Act 1966. Specifically, the Court had to determine if the transfer met the criteria for being void under section 120, which addresses uncommercial transactions, and if it constituted a preference under section 121, which deals with preferences to certain creditors. The Applicants argued that the transfer was made without adequate consideration and was therefore voidable.

Justice Gilmour found that the transfer did not involve adequate consideration and was made within the preference period under the Bankruptcy Act. Consequently, the Court concluded that the transfer was uncommercial and voidable under section 120, and also constituted a preference under section 121. The Court declared the transfer void against the Applicants, thereby restoring the property to the estate of the bankrupt for the benefit of all creditors. The Applicants were also awarded their costs from the estate of the Respondent.

Orders

Orders of the court

The Court declares that the Transfer by ROBYN PATRICIA GREEN to NOWBROOK PTY LTD on 26 July 2000 No.704221153 is void against the Applicants pursuant to both section 120 and section 121 of the Bankruptcy Act 1966.

That the Applicants’ costs of and incidental to this application be taxed in accordance with the Federal Court Rules and be paid for from the estate of the RESPONDENT in accordance with the Bankruptcy Act 1966.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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