Edward Ted Lakis v Michael Victor Lardis - [2017] NSWSC 321

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Edward Ted Lakis and Anor v Michael Victor Lardis and Anor [2017] NSWSC 321
Hearing dates: 1 and 2 February 2017, Plaintiffs’ and Defendant’s Final Submissions and Plaintiffs’ Loan Submissions 2 February, Defendant’s Additional Final submissions 13 February 2017, Plaintiffs’ Reply to Additional Final Submissions 20 February 2017
Decision date: 31 March 2017
Jurisdiction: Common Law
Before: Sackar J
Decision:
See paras [399] to [417]

Catchwords: S 37A of the Conveyancing Act 1919 (NSW) - intention to defraud creditors – alienation of property – purchaser in good faith with no notice of intent – credit of witnesses – trial judge’s assessment of evidence in absence of cross examination – the rule in Jones v Dunkel
Legislation Cited: Bankruptcy Act 1924 (Cth), s 121
Conveyancing Act 1919 (NSW), ss 7, 37A
Conveyancing (Amendment) Act 1930 (NSW)
Fraudulent Conveyances Act 1571 (Eng) (13 Eliz I, c 5)
Law of Property Act 1925 (UK), s 172
Property Law Act 1969 (WA), s 87
Cases Cited: Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26
Ali v Nationwide News Pty Ltd [2008] NSWCA 183
Allied Pastoral Holdings Pty Ltd v Cmr of Taxation (Cth) [1983] 1 NSWLR 1
Ashton v Pratt [2015] NSWCA 12
ASIC v Hellicar (2012) 247 CLR 345
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
B v U [2012] NSWSC 1416
Barling v Bishopp (1860) 29 Beav. 417
Barton v The Deputy Federal Commissioner of Taxation (1974) 131 CLR 370
Beale v Government Insurance Office of NSW [1997] 48 NSWLR 430
Blatch v Archer (1774) 1 Cowp 63
Browne v Dunn (1893) 6 R 67
Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380
Christmas v Nicol Bros. Pty Ltd and Anor (1941) 41 NSWSR 317
Civoken Pty Ltd & Anor v Madden Grove Developments Pty Ltd & Ors [2006] VSC 283
Cubillo v Commonwealth (No 2) (2000) 103 FCR 1
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95
Ex parte Mercer, in re Wise (1883) 17 Q.B.D 290
Fox v Percy (2003) 214 CLR 118
Green v Schneller [2002] NSWSC 671
Ho v Powell (2001) 51 NSWLR 572
In re Symon: Public Trustee v Symon [1944] SASR 102
In the matter of Amazon Pest Control Pty Limited [2012] NSWSC 1568
Ingram v Y Twelve [2013] NSWSC 1777
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 82 ALJR 419
John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Jones v Acfold Investments Pty Ltd (1984) 6 FCR 512
Jones v Dunkel (1959) 101 CLR 298
Jones v Sutherland Shire Council [1979] 2 NSWLR 206
Langdon v Gruber [2001] NSWSC 276
Lustre Hosiery Ltd v York (1935) 54 CLR 134
Marcolongo v Chen (2011) 242 CLR 546
Markem Corp v Zipher Ltd [2005] RPC 31
Murtagh v Murtagh [2013] NSWSC 926
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605
Pennimpede v Pennimpede [2009] NSWSC 85
Prentice v Cummins (No 5) (2002) 124 FCR 67
PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515
R v Navarolli (2009) 194 A Crim R 96
Re Amazon Pest Control Pty Ltd [2016] NSWSC 609
Re Cummins; Richardson v Cummins (1951) 15 ABC 185
Re Trautwein; Richardson v Trautwein (1944) 14 ABC 61
Regal Castings Ltd v Lightbody [2009] 2 NZLR 433
Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225
Sharp v Anderson (1994) 6 BPR 97,510
Silvera v Savic (1999) 46 NSWLR 124
Singh v Singh [2009] WASCA 53
Smith v Edward [2006] NFSC 11
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) and Others (1999) 160 ALR 588
Stileman v Ashdown (1742) 2 Atk. 477
Taylor v Jones 2 Atk. 600
Textralian Enterprises v Perpetual Trustees (Victoria) Ltd [2000] NSWCA 176
Thomas v Hollier (1984) 156 CLR 152
Toben v Nationwide News Pty Ltd [2016] NSWCA 296
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106
Trustees of Cummins v Cummins (2006) 227 CLR 278
Twyne’s Case (1601) 76 ER 809
Watson v Foxman (1995) 49 NSWLR 315
Wentworth v. Rogers & Anor. [2004] NSWCA 430
Young v Tibbits (1912) 14 CLR 114
Texts Cited: J D Heydon, Cross on Evidence, 9th ed (2013) LexisNexis Butterworths
Henry May, May on Fraudulent and Voluntary Conveyances, 3rd ed. (1908)
Hon JJ Spigelman AC, "Truth and the Law" (2011) 85 (11) Australian Law Journal 746
Category: Principal judgment
Parties: Edward Ted Lakis (First Plaintiff)
Amazon Pest Control Pty Ltd (In Liq) ACN 092 833 531 (Second Plaintiff)
Michael Victor Lardis (First Defendant)
Athena Lardis (Second Defendant)
Representation:
Counsel:
R Newlinds SC, N Bender (Plaintiffs)
C Birch SC, B De Buse (Second Defendant)
Solicitors:
Clayton Utz (Plaintiffs)
McGrath Dicembre & Company (Second Defendant)

File Number(s): 2016/256494
Publication restriction: N/A

Judgment

Proceedings
Background facts
Legal principles
Background to s 37A
Section 37A Conveyancing Act - Meaning of ‘alienation’
Section 37A Conveyancing Act - Meaning of ‘intent to defraud’
Section 37A Conveyancing Act – Meaning of ‘creditors’
Section 37A(3) Conveyancing Act - Purchaser in good faith without notice
Intention to create legal relations in oral agreements
Onus of proof
Credit of the witnesses

The parties’ submissions on the law
1. When did the alienation take place?
Defendant’s submissions: Early months of 2012
Plaintiffs’ submission: 29 January 2013, 21 November 2012, or, in the alternative, from early months of 2012 to 29 January 2013

2. Did Mr Lardis have the intent to defraud creditors at the time of alienation?
Plaintiffs’ submission
Defendant’s submissions

3. Was Mrs Lardis a purchaser in good faith not having, at the time of the alienation, notice of the purported intent of her husband to defraud creditors?
Defendant’s submission
Plaintiffs’ submission

4. If s 37A does render the Dolls Point Property Transfer voidable, what order should be granted?
Defendant’s submissions
Plaintiffs’ submissions

The witnesses
Evidence of Mrs Athena Lardis
Evidence of Mr Michael Lardis
Evidence of Mr Robert Macaulay

Consideration of the facts
Limits on findings
Impression of the witnesses
The facts – an overview
Key events and conversations – the detail
Early 2012: Alleged initial instructions to PTW regarding the transfer
April/May: Alleged instructions from PTW on the winding up proceedings
April/May: Alleged decision to change from 50% to 49% transfer
15 May: The loan applications
August/September: PTW affecting the transfer
September – 29 January: The transfer process

Failure to call witnesses
Conclusion on facts

Legal considerations
The relevant alienation of property
Intent to defraud, hinder or delay and notice of intent
The nature of any orders to be made

Judgment

Proceedings

These proceedings concern whether the transfer of the First Defendant’s (Mr Michael Victor Lardis) almost full one half interest in his family property to his wife and Second Defendant (Mrs Athena Lardis) was with the intent to defraud creditors and should therefore be avoided.
The Plaintiffs allege the transfer of 49% interest in the Defendants’ matrimonial home, 4 Skinners Avenue, Dolls Point, NSW (Dolls Point Property), from Mr Lardis to Mrs Lardis (who held 50% interest), was an alienation of property with the intent to defraud creditors of the now liquidated Second Plaintiff (Amazon Pest Control Pty Ltd, Amazon). The First Plaintiff (Mr Edward Ted Lakis) claims he has been prejudiced by this alienation since he and Mr Lardis were the directors and equal shareholders of Amazon.
The Plaintiffs seek a declaration the Dolls Point Property transfer registered on 29 January 2013 is void and set aside pursuant to s 37A of the Conveyancing Act 1919 (NSW) (Conveyancing Act). The Plaintiffs also seek an order that within seven days of declaring the Dolls Point Property transfer void, the Defendants take all necessary steps to transfer the 49% interest in the Dolls Point Property back to Mr Lardis.
The Second Defendant alleges the Dolls Point Property transfer was not done with the intent to defraud creditors. In the alternative, the Second Defendant claims Mrs Lardis was a purchaser in good faith with no notice of such intent, meaning the transfer is protected by s 37A(3) of the Conveyancing Act.

Background facts

In or around May 2000, Mr Lakis and Mr Lardis each became 50% shareholders and directors in Amazon, a pest control business.
From about December 2011, a dispute arose between Mr Lakis and Mr Lardis as to the future and management of Amazon. On 8 December 2011, Mr Lardis, through his then solicitors Denis M. Anderson, informed Mr Lakis he intended to wind up Amazon (CB1/91).
In reply, on 9 December 2011, Mr Lakis, through his then solicitors Robinson Legal, requested Mr Lardis refrain from taking further steps to wind up Amazon, so as to allow a forensic accountant to review Amazon’s books and records. In making these requests, Mr Lakis alleged Mr Lardis had withdrawn money from Amazon funds without explanation over the previous months, and intended to divert Amazon’s business to a new company Mr Lardis had registered on 3 November 2011 called Amazon Pest Management Pty Limited (CB1/92).
Sometime between late February and May 2012, the Second Defendant alleges an agreement was reached where Mr Lardis would transfer his interest (at this point being all of his 50% interest) in the Dolls Point Property to Mrs Lardis, and Mrs Lardis would allow Mr Lardis to use loan monies for his own use (50% Dolls Point Property Transfer). This assertion is disputed in proceedings.
On 28 February 2012, a Mr Robert Macaulay, partner at Pryzor Tzannes & Wallis Solicitors (PTW) met with the Defendants for a second time that month. On this second occasion he alleged the Defendants instructed PTW on the 50% Dolls Point Property Transfer, as well as indicating their plans to refinance the Dolls Point Property and an investment property at 41 George St, St Peters (Sydenham Property) (Affidavit of Mr Macaulay 1 December 2016 (RM) [9]). PTW allegedly opened a file for the Defendants at about this time (RM [12]). No documentary evidence was produced to reflect these assertions, and the Plaintiffs dispute the timing of these assertions in the proceedings.
On 1 March 2012, PTW prepared a costs agreement for the Defendants for the refinance of the Sydenham Property (CB1/98) (1 March Refinancing Cost Agreement or Costs Agreement). The copy of this agreement in the Court Book is not signed by any parties.
In or around March 2012, Mr Macaulay recalled a conversation with Mr Lardis, where Mr Lardis informed him he would liaise with “the bank” about the requirements for the 50% Dolls Point Property Transfer (RM [14]). The timing of this conversation is disputed in proceedings.
By or around April/May 2012, Mr Lardis alleged his relationship with Mr Lakis had deteriorated to the extent the two men were no longer talking, and both were obtaining legal advice concerning their respective rights (Affidavit of Mr Lardis 25 October 2016 (ML1) at [46]). Around this time, Mr Lardis alleged he obtained advice from PTW regarding Amazon’s potential liquidation. Mr Lardis contended PTW told him he had a “great case” to oppose any winding up application made by Mr Lakis and provided him with a cost estimate of $150,000.00 in legal fees (ML1 [49]-[51]). In oral testimony, Mr Lardis said this advice was either provided to him by Mr Macaulay or Mr Tolly (who is presumably a Mr Tolly Saivanidis), another partner at PTW (T73/35-40).
Later in April/May 2012, Mr Lardis alleged he instructed PTW to prepare paperwork for the 50% Dolls Point Property Transfer (ML1 [54]). The Plaintiffs also dispute this assertion in the proceedings.
At a later date in April/May 2012, Mr Lardis alleged he informed the National Australia Bank (NAB) of his intent to sell his interest in the Dolls Point Property to Mrs Lardis. According to Mr Lardis, NAB then advised him to retain 1% because “Athena’s income was insufficient to service an increase in the loan from $500,000.00 to about $1,200,000.00” (ML1 [55]). Mr Lardis then alleged he told Mrs Lardis of this new arrangement for him to transfer 49% of his interest in the Dolls Point Property to her so she would then hold 99% and he would retain 1% (49% Dolls Point Property Transfer) (ML1 [56]). Mrs Lardis placed this conversation in about June 2012 (Affidavit of Mrs Lardis 25 October 2016 (AL1) [42]).
In or about May 2012, Mr Macaulay alleged Mr Lardis told him about the bank’s requirement for Mr Lardis to retain 1%, and instructed him to proceed with the 49% Dolls Point Property Transfer. Mr Macaulay alleged he told Mr Lardis to have NAB contact PTW with the bank requirements so PTW could proceed (RM [15]). Mrs Lardis alleged both her and Mr Lardis instructed PTW to act for them on the 49% Dolls Point Property Transfer at the end of June 2012 (AL1 [45]).
On 15 May 2012, the Defendants made an application for a home loan with NAB for the Dolls Point Property and Sydenham Property (CB1/99-109, 110-120).
On 24 May 2012, a Mr Rolf Koops, lawyer at PTW, sent an email of ‘High’ importance to Mr Lakis informing him PTW was acting for Mr Lardis and Mr Lakis would have to pay for the accountant’s investigation into the accounts of Amazon (CB1/124).
On 4 June 2012, Mr Lakis, through his solicitors Robinson Legal, sent an email to Mr Koops objecting to Mr Lardis’ attempts to call a directors meeting with one business days’ notice (CB1/128-129).
On 5 June 2012, Mr Koops replied to Sam Spackman, lawyer at Robinson Legal, objecting to the grounds raised in Robinson Legal’s 4 June 2012 email (CB1/130-131). In the email, Mr Koops mentioned the possibility of needing to obtain a court appointed administrator, and that Mr Lardis was not interested in buying Mr Lakis’ shares or trading his share for an increased share in Amazon.
On 8 June 2012, Mr Spackman replied to Mr Koops’ email of 5 June 2012, where, in relation to the refusal to buy Mr Lakis’ share, Mr Spackman noted if Mr Lardis did not want to purchase Mr Lakis’ share, then the best course could be to put Amazon on the market (CB1/132).
Mr Spackman and Mr Koops engaged in similar correspondence on 12 June 2012 regarding the deadlock of Amazon.
On 20 June 2012, the Defendants executed a discharge/refinance authority in respect of three loan accounts with the Commonwealth Bank of Australia (CBA) (CB1/134-140).
On 29 June 2012, Mr Lakis made a “final” offer to Mr Lardis to not to commence proceedings if Mr Lardis agreed to pay him $250,000 for his shares in Amazon, and resign as director and secretary of Amazon (CB1/141-142).
On 6 July 2012, Mr Lardis sent an email to a Mr George Kaloudis of Laselle Finance, the mortgage broker for the Defendants, purporting to attach Mr Lardis’ financials (CB1/162-191). The attachment contains the Company Tax Return for Amazon Pest Control for 2010 and 2011, and Mr Lardis’ Individual Tax Returns for 2010 and 2011.
On or around 9 July 2012, Mr Kaloudis sent an email to a Ms Moushumi Kumar, an employee at NAB, attaching the financial attachments of Mr Lardis’ 6 July 2012 email to Mr Kaloudis (CB1/194).
On or around 9 July 2012, Ms Kumar sent a reply to Mr Kaloudis asking for, among other things, a brief background on Mr Lardis, his business and whether Mrs Lardis has any income (CB1/193).
In response to Ms Kumar’s email, on 10 July 2012, Mr Kaloudis informed Ms Kumar the “underlying cause” behind the Defendants wanting to change the borrowers on the loans to a trust was “asset protection”. This appears to be only in relation to the loan secured over the Sydenham Property (Affidavit of Mr Lardis dated 1 December 2016 (ML2) [6], T82/5-25). Mr Kaloudis also said Mrs Lardis “works from home on a casual basis as a beautiful [sic] therapist,” but provided, it seems, no detail of her income (CB1/192).
On 17 July 2012, following Mr Lardis’ rejection of Mr Lakis’ offer to purchase his shares, Mr Lakis commenced proceedings before Black J in the Supreme Court of New South Wales to wind up Amazon (winding up proceedings), to be returnable before the Court on 28 August 2012.
On 18 July 2012, NAB approved two loans for the Defendants over the Dolls Point Property. The first loan was for the sum of $480,000.00 to Elounda Holdings Pty Limited ATF The Lardis Holdings Unit Trust. The second loan was for the sum of $1,220,000 to the Defendants, jointly (CB1/200-201).
On 19 July 2012, the Defendants received confirmation of the NAB loan approvals (CB1/274).
That same day (19 July 2012), the Defendants executed a mortgage (Registered Mortgage No AH472577C) over the Dolls Point Property in favour of NAB (CB1/291-293).
On 24 July 2012, Mr Lardis told Mr Lakis he was prepared to defend the winding up proceedings if Mr Lakis’ application was not withdrawn before 27 July 2012 (CB1/294-296).
On 1 August 2012, PTW accepted instructions to act for Mr Lardis in respect of the winding up proceedings, and Mr Lardis decided to defend Mr Lakis’ winding up application (RM [22]).
On 7 August 2012, the sum of $953,417.86 was paid by NAB to CBA in order to discharge the mortgage over the Dolls Point and the Sydenham Properties (CB1/305-301, 318-322).
On 13 August 2012, a surplus of $256,370.14 was deposited into a joint NAB bank account of the Defendants ending in 8842 (CB1/305, Plaintiffs’ Loan Submission [3]).
On 28 August 2012, Mr Lardis and Mr Lakis appeared before the Senior Deputy Registrar Howard of the Supreme Court of New South Wales for the winding up proceedings, and a timetable was set (CB2/379-380).
In late August/early September 2012, Mrs Lardis allegedly asked Mr Lardis to have PTW send a letter confirming the 49% Dolls Point Property Transfer. Mr Lardis said he would do it the following day (AL1 [45]).
In late August 2012, Mr Lardis alleged he asked Ms Kumar whether the 49% Dolls Point Property Transfer had taken place, and Ms Kumar told him to follow it up with the solicitors (AL1 [66]).
The next day or two, Mr Lardis alleged he contacted Mr Macaulay to find out what had happened to the 49% Dolls Point Property Transfer. Mr Lardis alleged Mr Macaulay said he would get someone onto it (ML1 [67]). However, Mr Macaulay alleged Mr Lardis phoned to inform him NAB had approved the loan, and requested PTW proceed with the 49% Dolls Point Property Transfer. Someone at PTW (but not Mr Macaulay) then directed a Ms Tina Hsu, a property law solicitor at PTW, to implement the 49% Dolls Point Property Transfer (RM [16]-[17]).
On 4 September 2012, Mr Lardis attended a conference with Mr M Cleary (Counsel) and Mr Koops to discuss the winding up proceedings and draft and finalise affidavits. Mr Wilks was also likely in attendance since he was the ‘Person Responsible’ for the timesheets recording the conference (CB6/1670).
On 5 September 2012, Ms Hsu sent an email to Ms Kumar requesting a list of mortgagee’s requirements and proposed timeframe for the Dolls Point Property transfer (CB2/378). The email said:

Dear Moushumi,
Thanks for the call this morning.
In relation to 4 Skinners Ave, Dolls Point Michael would like to transfer the majority of interest to his wife Athina so that the result would be Michael holding 1% and Athina 99% as tenants in common.
Michael would like to get this done as soon as possible so could you please provide a list of mortgagee’s requirements and proposed timeframe to complete this transfer?
I look forward to hearing from you soon.
(my emphasis)

On 11 September 2012, Ms Hsu sent a follow up email to Ms Kumar asking her to advise on the bank’s requirements “as soon as possible” (CB2/381). NAB replied to Ms Hsu that same day requesting “Please forward us the transfer and we will action it at our end” (CB2/383).
On 17 September 2012, Mr Lakis and Mr Lardis appeared before the Corporations List Judge for directions on the hearing date for the winding up proceedings (CB2/379-380).

On 7 October 2012, a tax invoice to PTW was prepared by Mr Adrian Gray for the valuation of the Dolls Point Property (CB2/389).
On 9 October 2012, Ms Hsu, in an email flagged with ‘High’ importance, asked NAB whether PTW would need to provide their own valuation and arrange the stamping for the 49% Dolls Point Property Transfer (CB2/390). NAB replied that same day informing Ms Hsu PTW would need to arrange those steps (CB2/393-396).
On 10 October 2012 at 12:35 pm, Ms Hsu sent an email to Mr Lardis asking if he was happy to proceed with the NAB valuer Mr Gray (CB2/397) to value the Dolls Point Property for stamp duty purposes, for a fee of $500. Mr Lardis replied at 12:37 pm, agreeing to use Mr Gray, saying “Yes go ahead I need this done asap” (CB2/398-399).
On 18 October 2012, Websters Solicitors (Websters), then acting for Mr Lakis, sent an email to PTW (Attn: Mr Wilks, with “TK, RK, and TH” copied in) stating (CB2/408-409):

It has come to our client’s attention that your client has been actively transferring or seeking to transfer his whole interest or the majority of his interest in properties held by him and his wife, being 41 George Street, Sydenham and 4 Skinners Avenue Dolls Point.

In the same email, Websters asked PTW to have Mr Lardis give an undertaking he would refrain from transferring his interest in Dolls Point Property and Sydenham Property, and not dispose of any other assets in his name.
On 19 October 2012, NAB approved the loan over the Sydenham Property (CB2/410) for $480,000.00.
In a letter dated 25 October 2012 in response to the 18 October email from Websters, Mr Macaulay and Mr Wilks on behalf of PTW refused to provide this undertaking, stating, among other things (CB2/422-423):

2. Arrangements by our client concerning the refinance of properties 41 George Street, Sydenham and 4 Skinners Avenue, Dolls Point NSW were put in place and in train for over 12 months and well before these proceedings were commenced and have nothing to do with these court proceedings.
(my emphasis)

On 1 November 2012, PTW provided the Defendants with Mr Gray’s property valuation and the 7 October tax invoice, and confirmed the Defendants’ instructions as follows (CB2/443-446):

“We wish to confirm your instructions:
Dear Mr & Mrs Lardis
RE: YOUR TRANSFER TO PROPERTY: 4 SKINNERS STREET, DOLLS POINT
We have received the valuation report from registered valuer, Adrian Gray. As discussed, he has valued the above Property at $1,500,000.00. A copy of the report and his invoice is attached.
We note that the Property is currently held by you and your wife Athina as joint tenants. We confirm your instructions that you wish to transfer 49% of your interest to your wife where you will hold 1% and Athina will hold 99% as tenants in common.
We confirm our previous advice that there are not stamp duty exemptions available for this type of transfer. The stamp duty based on 49% of $1,500,000.00 is $28,585.00”.
(my emphasis)

On 2 November 2012, PTW obtained a valuation of the Dolls Point Property for stamp duty purposes (CB2/457).
On 7 November 2012, the winding up proceedings commenced before Black J (CB2/462).
On or around 21 November 2012, the Defendants attended a meeting at PTW regarding the 49% Dolls Point Property Transfer, where Ms Hsu required a cheque and Mrs Lardis’ passport (CB2/449). Based on these events, the Plaintiffs submit the transfer of the Dolls Point Property may have been executed at this meeting (Plaintiffs’ Opening Submissions [9]).
On 28 November 2012 the 49% Dolls Point Property Transfer was signed (CB2/452), and PTW forwarded the transfer to their registration service (CB2/ 457).
On 14 December 2012, Black J ordered Amazon be wound up pursuant to s 461(k) of the Corporations Act 2001 (Cth), staying the order until 24 January 2013: see In the matter of Amazon Pest Control Pty Limited [2012] NSWSC 1568. In making this order, His Honour made findings Mr Lardis used Amazon’s funds to pay for personal expenses, and misdescribed those expenses in Amazon’s records as business expenses (at [9]-[10], [21]-[25]). The judge found Mr Lardis had not accounted for $76,370.49 taken out of the Amazon accounts. The judge also found Mr Lardis had sought to divert business from Amazon to other companies (at [16]).
On 24 January 2013, a liquidator was appointed to Amazon.
That same day (24 January 2013), the 49% Dolls Point Property Transfer was lodged with the Land and Property Information (LPI) and the consideration was said to be $1.00 (CB2/493).
On 29 January 2013, the 49% Dolls Point Property Transfer was registered and recorded as Registered Transfer No AH413877X over Folio Identifier 20/18987 (CB2/494-495, 496-497). As a result of this transfer, Mr Lardis was recorded to be holding 1% interest in Dolls Point Property as tenant in common with Mrs Lardis who then held the remaining 99% interest.
On 8 April 2014 and 6 May 2014, Mr Lardis and Mr Lakis respectively took assignments of Amazon’s claims against each other. The claims centred on breaches of their fiduciary and statutory duties as directors of Amazon.
On 23 March 2015, proceedings commenced before Young AJA, with Mr Lakis and Mr Lardis pressing their assigned claims. The matter was heard on 7-11 March 2016: see Re Amazon Pest Control Pty Ltd [2016] NSWSC 609.
On 12 May 2016, Young AJA gave principal judgment, holding both Mr Lardis and Mr Lakis liable to refund monies to Amazon: see Re Amazon Pest Control Pty Ltd [2016] NSWSC 609. His Honour held Mr Lardis had taken $861,076.55 in cash from Amazon between 2008-2012, and used further Amazon funds to pay for personal expenses, the quantum of which was to be determined (at [81]-[88], and [74]). His Honour also held Mr Lakis took $30,000 of Amazon funds to bribe a government official (at [113]).
On 1 September 2016, Young AJA made formal orders Mr Lardis pay Amazon $1,090,076.24 plus interest (CB3/746A).
On 8 September 2016, Mr Lardis became bankrupt by his own petition.
On 23 September 2016, the Federal Court of Australia granted leave to continue the current proceedings pursuant to s 58(3)(b) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act).

Legal principles

A number of legal principles are invoked in this case. I propose to address each before analysing the facts.

Background to s 37A

Section 37A of the Conveyancing Act provides:

37A Voluntary alienation to defraud creditors voidable
(1) Save as provided in this section, every alienation of property, made whether before or after the commencement of the Conveyancing (Amendment) Act 1930, with intent to defraud creditors, shall be voidable at the instance of any person thereby prejudiced.
(2) This section does not affect the law of bankruptcy for the time being in force.
(3) This section does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intent to defraud creditors.

The statutory lineage of s 37A dates back to 1571 with the Fraudulent Conveyances Act 1571 (Eng) (13 Eliz I, c 5) (Elizabethan Statute). The Elizabethan Statute was replaced in England by s 172 of the Law of Property Act 1925 (UK) which reproduced in substance the Elizabethan Statute. Section 172 was then adopted with different wording but to similar effect across Australian States and Territories. In NSW, this meant the introduction of s 37A to the Conveyancing Act under the Conveyancing (Amendment) Act 1930 (NSW). Other legislative provisions in Australia are also sourced from the Elizabethan Statute, such as s 121 Bankruptcy Act. For a more complete legislative history of s 37A, see Marcolongo v Chen (2011) 242 CLR 546 (Marcolongo v Chen) at [12]-[17].
The purpose of the Elizabethan Statute was to protect creditors in an increasingly commercialised England where fraudulent conveyances were becoming commonplace. The Court of the Star Chamber captured this climate in Twyne’s Case (1601) 76 ER 809 at 815-816:

And because fraud and deceit abound in these days more than in former times, it was revolved in this case by the whole Court, that all statutes made against fraud should be liberally and beneficially expounded to suppress fraud.

The Elizabethan Statute in its modern formulations (including s 37A), has continued to be construed liberally to serve its intended purpose of protecting creditors’ rights: see, for example, Marcolongo v Chen at [20] and Langdon v Gruber [2001] NSWSC 276 at [58] per Austin J (Langdon v Gruber).

Section 37A Conveyancing Act - Meaning of ‘alienation’

The term ‘alienation’ has been rooted in s 37A since the section’s inception. The Elizabethan Statute is styled as “An Act against fraudulent deeds, alienations, etc.” and the long title opens with: “For the avoiding and abolishing of feign, covinous and fraudulent feoffments, gifts, grants, alienations, conveyances, bonds, suits, judgments and executions, as well as of lands and tenements, as of goods and chattels…”
In Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 (Cardile v LED Builders) at [65], the plurality (Gaudron, McHugh, Gummow and Callinan JJ) held alienation “is a parting with property and includes a parting with some interest in the property” (citing Re Cummins; Richardson v Cummins (1951) 15 ABC 185; In re Symon; Public Trustee v Symon [1944] SASR 102). The plurality went on to note at [67]:

67 Alienation is the transfer of value from one person to another (Ord Forrest Pty Ltd v Federal Commissioner of Taxation (1974) 130 CLR 124 at 142). It is usually understood as applying only to a transfer of property effected by the action of the transferor, as distinct from a transfer by involuntary operation of law (Australian Trade Commission v Film Funding & Management Pty Ltd (1989) 24 FCR 595 at 613).

It is worth noting ‘property’ under the Conveyancing Act is defined broadly to include “real and personal property”; s 7 Conveyancing Act.
In Re Symon; Public Trustee v Symon [1944] SASR 102 (Re Symon) at 108, Mayo J considered alienation to be the:

act or series of acts of alienating, and taking place wherever the owner of land or of an interest therein, so acts to divest himself of his interest or lesser interest and to vest the same in another person.

Examples of the “series of acts” which may form part of an ‘alienation’ include the execution of the transfer followed by the lodgement, or court orders which require a transfer to be executed.
In Singh v Singh [2009] WASCA 53, while considering the meaning of ‘alienation’ under the Western Australian analogue of s 37A (s 87 Property Law Act1969 (WA)), Pullin JA (with whom Martin CJ and Newnes AJA agreed) held at [60] the execution of the transfer of land and subsequent lodgement of the transfer at the Titles Office were “steps which amounted to the alienation”.
Green v Schneller [2002] NSWSC 671 involved the transfer of property executed following Local Court orders. Barrett J, as he then was, in considering whether consent orders formed part of the alienation process, summarised the relevant authorities at [28]:

[28] It is necessary now to say a few words about the meaning of “alienation” in s 37A. It is, in my view, synonymous with “transfer” in the analogous Bankruptcy Act provision, with the result that the following observation of Tamberlin J in Mateo v Official Receiver in Bankruptcy (2002) 188 ALR 667, above, at [24], is relevant:
In my view, the “transfer” in this matter consisted of the whole transaction ranging from the signing of the consent orders on 18 April 2000 through to the completion of the transfer of the interest on or about 10 August 2000. There is no basis on which to isolate the making of the consent orders from the “transfer” which took place and rely only on the formal instrument of transfer.
This is consistent with the approach taken by Hodgson CJ in Eq in Silvera v Savic, above, at [78]:
In my opinion, the “alienation” in this case was the whole process of obtaining the Local Court order and the consequent transfer; and it is that whole alienation that is made voidable by s 37A.

Barrett J ultimately found at [29] the consent orders did not form part of the alienation since it was not a step instigated or made by the property owner undergoing the alienation.

Section 37A Conveyancing Act - Meaning of ‘intent to defraud’

The most recent High Court authority on when parties have manifested intention such that a transaction is liable to be set aside pursuant to s 37A is Marcolongo v Chen. In that case, the plurality (French CJ, Gummow, Crennan and Bell JJ) construed s 37A liberally, holding “defraud” to mean “delay, hinder or [otherwise] defraud,” and a desire on the part of the debtor that creditors suffer loss or a purpose of causing loss need not be demonstrated for intent to be made out (at [19]-[20] and [32]).
After considering the provenance of s 37A, the plurality went on to say at [32]-[34]:

32. …Mrs Marcolongo correctly relies upon a statement by Blanchard and
Wilson JJ when considering the comparable New Zealand legislation (Property Law Act 1952 (NZ), s 60, now replaced by sub-pt 6 of Pt 6 (ss 344 to 350) of the Property Law Act 2007 (NZ)) in Regal Castings Ltd v Lightbody [2009] 2 NZLR 433 at 456-457. Their Honours said that it was unnecessary to show that the debtor wanted creditors to suffer a loss or that the debtor had a purpose of causing loss: it was necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly. Mrs Marcolongo correctly relies also upon the observation by Russell LJ when considering s 172 of the 1925 Act in Lloyds Bank Ltd v Marcan [1973] 1 WLR 1387 at 1390-1391; [1973] 3 All ER 754 at 759-760. His Lordship said:
“I am not sure what is meant by a perfectly innocent defeat, hindrance or delay. It must be remembered that in every case under this section the debtor has done something which in law he has power and is entitled to do: otherwise it would never reach the section. If he disposes of an asset which would be available to his creditors with the intention of prejudicing them by putting it, or its worth, beyond their reach, he is in the ordinary case acting in a fashion not honest in the context of the relationship of debtor and creditor. And in cases of voluntary disposition that intention may be inferred … The intention of Mr Marcan is perfectly plain: the lease to his wife was designed expressly to deprive the bank of the ability to obtain the vacant possession to which the bank plainly attributed value, and to diminish to that extent the strength of the bank’s position as creditor. To take that action at that juncture, in my judgment, was, in the context of relationship of debtor and creditor, less than honest: it was sharp practice, and not the less so because he was advised that he had power to grant the lease. It was, in my judgment, a transaction made with intent to defraud the bank within s 172, and would have been within the [Elizabethan Statute].”
33. To that may be added the statement in the joint reasons of the Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 162 [173]:
“As a matter of ordinary understanding, and as reflected in the criminal law in Australia (Macleod v The Queen (2003) 214 CLR 230 at 242 [36]-[37]), a person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest by those standards. Further, as early as 1801, Sir William Grant MR stigmatised those who ‘shut their eyes’ against the receipt of unwelcome information (Hill v Simpson (1801) 7 Ves Jr 153 at 170 [32 ER 63 at 69]. See further May v Chapman and Gurney (1847) 16 M & W 355 at 361 [153 ER 1225 at 1228]; Jones v Gordon (1877) 2 App Cas 616 at 625, 628-629, 635; English and Scottish Mercantile Investment Co Ltd v Brunton [1892] 2 QB 700 at 707-708).”
34. Lym relied upon the references by Brennan CJ and McHugh J in Cannane v J Cannane Pty Ltd (In liq) (1998) 192 CLR 557 at 565-566 [10]-[12] to “the onus of proving an actual intent”. But their Honours were adding the word “actual” as a periphrasis to emphasise that, while the existence of the intent might be inferred from the evidence, it was to be found as a fact. With Gaudron J and Gummow J, Brennan CJ and McHugh J concluded that the facts of Cannane did not support the drawing of such an inference ((1998) 192 CLR 557 at 568 [17], 572 [31]-[32], 579-580 [58]).

It is not necessary, for the purposes of s 37A, there be actual proof the alienator had in his or her mind an intention to defraud creditors; the court can attribute to the alienator the requisite fraudulent intent if, from all the surrounding circumstances, it appears the effect might be expected to be, or has in fact been, to defeat creditors; Re Trautwein; Richardson v Trautwein (1944) 14 ABC 61 at 75 per Clyne J, cited with approval by the Full Court of the Federal Court of Australia in PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 523.
The relevant intention need not be a predominant or sole intention; Marcolongo v Chen at [57] and [58]. A transfer may be done with a number of intents in mind; Barton v The Deputy Federal Commissioner of Taxation (1974) 131 CLR 370 at 375 per Stephen J.
Further, it is not necessary to show the alienator acted dishonestly in wanting creditors to suffer loss. Rather, the dishonesty follows from proof of an existence of any intention to hinder, delay or defeat creditors; Marcolongo v Chen at [32], approving the findings in Regal Castings Ltd v Lightbody [2009] 2 NZLR 433 at 456-457 per Blanchard and Wilson JJ.
The Plaintiff bears the onus of proof of intent to defraud. However, as explained in Marcolongo v Chen at [24]-[25], the evidentiary onus may shift where the alienation is voluntary and made in certain circumstances which give rise to an inference of intent to defraud:

Nevertheless, the nineteenth century cases did support a related distinction bearing upon the sufficiency of proof in these cases. The effect of the decisions was summed up as follows in the treatment under the title “Fraudulent and Voidable Conveyances” in the first edition of Halsbury’s Laws of England ((1911), vol 15, p 84, para 173):
In an action to set aside an alienation under the statute the onus of proof of actual fraud on the part of the grantor, and that the grantee was privy to the intent, rests upon the Plaintiff where the alienation is for valuable consideration (a) (In re Johnson; Golden v Gillam (1881) 20 Ch D 389 at 394; Re Cranston; Ex parte Cranston (1892) 9 Morr 160; Re Tetley; Ex parte Jeffrey (1896) 3 Mans 226 at 233; In re Hirth; Ex parte Trustee [1899] 1 QB 612 at 620; In re Holland; Gregg v Holland [1902] 2 Ch 360; In re Reis; Ex parte Clough [1904] 2 KB 769). Where, however, the alienation is voluntary, then on proof that the grantor was at the time of its execution contemplating his entry upon a hazardous business (b) (Mackay v Douglas (1872) LR 14 Eq 106), or that the natural consequence of the alienation was to delay, hinder, or defraud creditors (c) (Freeman v Pope (1870) LR 5 Ch App 538; Ex parte Mercer; In re Wise (1886) 17 QBD 290; In re Holland; Gregg v Holland [1902] 2 Ch 360; see Re Tetley; Ex parte Jeffrey (1896) 3 Mans 226), or that the circumstances under which the alienation was effected bore one of the indications or badges of fraud hereafter mentioned (d) (see Halsbury’s Laws of England, 1st ed (1911) vol 15, pp 84-87, paras 174-177), the onus of upholding the alienation is imposed on the Defendants.
The two leading authorities given in footnote (c) to this passage are Freeman v Pope ((1870) LR 5 Ch App 538) and Ex parte Mercer; In re Wise ((1886) 17 QBD 290). However, neither case concerned a transaction cast in the form of a contract for sale of property. Rather, each transaction was a voluntary settlement of property, which was set aside in the first case but not in the second.

25 The point sought to be made in the text of Halsbury attached to footnote (c) may be expressed by saying that it would be the duty of the judge to direct a jury that they might infer an intention by the settlor to defeat or delay creditors, even in the absence of direct evidence of that intention, where this outcome was the necessary consequence of a voluntary settlement (cf Williams v Lloyd (1934) 50 CLR 341 at 360-361). In this way, it was easier to infer a dishonest intention if the conveyance were voluntary than if it were made for consideration (cf Lloyds Bank Ltd v Marcan [1973] 1 WLR 1387 at 1392; [1973] 3 All ER 754 at 761). Evidence that the conveyance was voluntary does not replace the requirement of proof of intent by a distinct category where constructive fraud, with notions of constructive knowledge or notice as understood in equity, would suffice for the application of s 37A[80]. Rather, the evidence is that species which has sufficient weight to entitle the fact finder to decide an issue (here the necessary intent) in favour of the moving party, although the fact finder is not obliged to do so and other evidence given may be decisive to the contrary (see Cross on Evidence, 8th Aust ed (2010), p 121 [1600]).

Further, in Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557, Brennan CJ and McHugh J said at [12] an inference of an intention to defraud creditors may be drawn where a disposition results in a “subtraction of assets” available for payment of creditors:

Although the party impugning the disposition of property must show an actual intent to defraud creditors at the time of the disposition, the intent may be inferred (Noakes v Harvy Holmes & Son (1979) 37 FLR 5 at 10; 26 ALR 297 at 303) from the making of a disposition which, to adopt the words of Lord Hatherley LC in Freeman v Pope (1870) 5 Ch App 538 at 541, "subtracts from the property which is the proper fund for the payment of [the] debts, an amount without which the debts cannot be paid". The "proper fund" may consist in assets out of which future creditors as well as present creditors would be entitled to be paid a dividend in respect of what is owing to them. Therefore a subtraction of assets which, but for the impugned disposition, would be available to meet the claims of present and future creditors is material from which an inference of intent to defraud those creditors might be drawn. Whether that inference should be drawn depends upon all the circumstances of the case.

In Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26 at [105], Sackville AJA (with whom Campbell JA agreed) considered it:

may be possible in a particular case to demonstrate that an alienation of property was made with the intent to defraud creditors even where the effect of the alienation is not to hinder, delay or defraud creditors
(my emphasis)

Section 37A Conveyancing Act – Meaning of ‘creditors’

‘Creditors’ for the purpose of s 37A includes future, contingent or prospective creditors; Trustees of Cummins v Cummins (2006) 227 CLR 278 at 291 (referring to s 121 Bankruptcy Act but equally applicable to s 37A); Ingram v Y Twelve [2013] NSWSC 1777 at [107].
The wide reach of the term ‘creditors’ spawns from the preamble of the Elizabethan Statute which declares the object of the Statute to be for the protection of creditors and “others”. As observed by Fortesque M.R, in Taylor v Jones 2 Atk. 600 when considering the Elizabethan Statute preamble:

The words others seems to be inserted to take in all manner of persons, as well as creditors after, as before the settlement, whose debts should be defrauded…The words of the statute, therefore, seem to be so general in order to take in all persons who shall be any ways hindered or delayed.

In line with the broad construction of ‘creditors’, there is clear authority the alienator does not need to be indebted or insolvent at the time of the transfer for s 37A to be enlivened. Lord Hardwick at 481 in Stileman v Ashdown (1742) 2 Atk. 477 said:

It is not necessary that a man should actually be indebted at the time he enters into a voluntary settlement to make it fraudulent; for if a man does it with a view to his being indebted at a future time, it is equally fraudulent, and ought to be set aside.

However, there is no clear authority on how real, definite and impending the risk of being indebted sometime in the future must be. Stephen J (with whom Menzies and Gibbs JJ agreed) in Barton v The Deputy Federal Commissioner of Taxation (1974) 131 CLR 370 noted at 374 there must be “awareness of an impending liability” or a belief in “some impending indebtedness.” While these comments were in relation to s 121 Bankruptcy Act, they are it seems equally applicable to s 37A; see, for example, PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 522.
Sackville J adopted similar language to Stephen J in a further bankruptcy case, Prentice v Cummins (No 5) (2002) 124 FCR 67 at 91, stating:

A fortiori, a transferor may have the requisite purpose if assets are given away at a time when he or she is aware of an impending liability, but one which has not yet crystallised into an existing indebtedness: Barton v Deputy Commissioner of Taxation at 374 per Stephen J (where the impending liability related to a taxation debt which would come into existence only once an assessment had issued).

Austin J at [58] in Langdon v Gruber found a “claim likely to mature into a debt in the immediate or foreseeable future” may suffice for s 37A:

[58] At the time when Mr Gruber executed the transfer of his interest in the Ramsgate property, and at the time of lodgement and registration of the transfer, Ms Langdon was not his creditor. She became a creditor only when judgment was entered in her favour, more than a year later. This raises the question whether a transfer made with intent to defraud a person who subsequently becomes a creditor falls within s37A. In my opinion, the section applies in such a situation. It is not necessary to take a particularly liberal construction to reach that conclusion, as long as one bears in mind the purpose of the section. Here the transfer was of Mr Gruber's only significant asset, and he executed it at a time when he expected the hearing of the Canadian civil proceedings to be imminent. He had been advised by his Canadian barrister not to attempt a defence of the proceedings because it would be futile. Therefore, there was a strong likelihood (and he understood that there was a strong likelihood) that a verdict would be entered against him in the relatively near future. If, in such circumstances, Mr Gruber transferred his interest in the property in order to remove it from the reach of Ms Langdon, it would be no distortion of the statutory language to say that he did so with the intention of defrauding her in her capacity as a creditor. The section does not literally require that the persons intended to be defrauded must all be creditors at the time of the transfer. To impose that construction on the statutory language would be to remove from its scope a situation falling squarely within the legislative policy and the object of the section. It is enough, in other words, that the intention is to defraud a person whose claim is likely to mature into a debt in the immediate or foreseeable future.
(my emphasis)

When dealing with a transfer potentially on the eve of litigation, the remarks in May on Fraudulent and Voluntary Conveyances, 3rd ed. (1908) (May on Fraudulent and Voluntary Conveyances) at p. 48 are instructive:

A voluntary conveyance pendente lite, or by a person against whom an action for damages, & c., is pending, and which he must have known would probably go against him, is always open to an imputation of fraud, though at the time of the settlement he was not in debt; unless the pending action is a claim for damages, of a very speculative character, and the probability of substantial damages is slight.

There are a number of earlier ‘pendente lite’ cases which examine the parameters of when legal proceedings on foot - or soon to be on foot - at the time of a transfer may lead to an intent to defraud creditors. In Ex parte Mercer, in re Wise (1883) 17 Q.B.D 290 (Ex parte Mercer, in re Wise), the Court of Appeal held the Defendant had no intent to defraud, despite making a voluntary post-nuptial settlement of a legacy of £500 directly after being served with a writ in action for breach of promise of marriage. Lindley L.J observed at 301:

…I also believe he was speaking the truth and that he thought the action for breach of promise would come to nothing. At all events, the result of it was in the highest degree speculative; he was not then indebted to the Plaintiff but she had made a claim against him which might or might not result in damages.

The Divisional Court in Ex Parte Mercer, in re Wise (whose decision was upheld by the Court of Appeal) distinguished the case from Barling v Bishopp (1860) 29 Beav. 417 (Barling v Bishopp). In the latter case, the Defendant executed a deed of voluntary conveyance of land to his daughter a fortnight after notice of a trial in the action of trespass and 17 days before the trial commenced. Romilly, M.R. held the deed was void, noting at 421:

Every man knows that he cannot go to law without incurring some expense. This deed was to provide for the worst which might happen, by conveying away his property beforehand. The grantor and the Defendant have given no explanation, I am of the opinion that the effect of the deed was to defeat persons who might become his creditors, and was executed in favour of his daughter, who it is clear would not allow her father to starve.
...
I am of opinion that it is a necessary inference to be drawn from the facts and dates, that this deed was executed with a view to defeating persons who might become his creditors, in consequence of acts done by him.

Barling v Bishopp was relied upon in a more recent case before the Supreme Court of Norfolk Island, Smith v Edward [2006] NFSC 11. The case concerned Plaintiffs injured by a motor vehicle driven by the Defendant. Several months after the accident, and just over two weeks after the Plaintiffs’ solictors requested the Defendant’s insurance details, the Defendant transferred real property to his nephew for $1.00 consideration, and the nephew granted the Defendant life estate in the property. The Plaintiffs brought an application under the Statute of Elizabeth, which was still in force for Norfolk Island. Kiefel J, as she then was, at [5]-[6] made reference to the Plaintiffs’ reliance on Barling v Bishopp, and found the conveyance ought to be set aside:

The Plaintiffs have also drawn my attention to the decision in Barling v Bishopp (1860) 29 BEAV 417; 54 ER 689 which dealt with the question whether a transfer was void under the statute because the Plaintiff in proceedings, which had not been heard and determined, was not a creditor at the time of the conveyance. The statute was held to apply because the Defendant was taken to know that any legal action involves expense.
In the present case the first Defendant was on notice of the Plaintiffs’ proposed proceedings and it may readily be inferred that the conveyance was made as a response to that notice. There would appear to be no other reasonable inference open and the first Defendant has not availed himself of any opportunity to put forward any other explanation. The transfer could not be said to be for valuable consideration, given the value of the land and the conveyance of the life interest. The result intended by the first Defendant is patently obvious.

In the NSW cases of Silvera v Savic (1999) 46 NSWLR 124 and Langdon v Gruber, transfers of property were set aside for intent to defraud creditors, where proceedings for unliquidated damages had commenced but not yet been tried.

Section 37A(3) Conveyancing Act - Purchaser in good faith without notice

Sub section 37A(3) also has its genesis in the Elizabethan Statute, specifically in a proviso in favour of innocent third parties who:

…upon good consideration and bona fide lawfully conveyed or assured to any person or persons, bodies politik or corporation, not having at the time of such conveyance or assurance to them made, any manner of notice or knowledge such covin, fraud or collusion.

Again as summarised in May on Fraudulent and Voluntary Conveyances at p. 58 (footnotes omitted):

A bona fide purchaser, without notice of any fraud on creditors, is more entitled to be protected than the creditors themselves, whose only claim is on the general estate; for he has paid his money for the particular estate which he claims, and is expressly exempted from the operation of the Statute, by this section. And even though there be some suspicious circumstances as regards the purchaser’s part in the matter, which may be ground for rigid inquiry, the purchase will nevertheless be held good, unless it is shewn that it was a contrivance to defeat creditors, and that the purchaser was privy to it.

Intention to create legal relations in oral agreements

For an agreement - either oral or in writing - to be binding, the parties must manifest an intention to create legal intentions. This requires making an objective assessment of the state of affairs between the parties as distinct from the identification of any subjective reservation or intention; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [25].
The nature of this objective assessment when it comes to oral agreements was reiterated by Hammerschlag J in John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94]:

[94] Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.

Formal language of offer and acceptance is not required for a contract to be formed: see Ashton v Pratt [2015] NSWCA 12 at [80] per Bathurst CJ, citing Vroon BV v Foster’s Brewing Group Ltd [1994] VR 32 at 79.
The commercial context and parties’ previous dealings are relevant to determining whether a binding agreement has come into existence between the parties; Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605 at [15] (per Bathurst CJ), [72], [84] (per Beazley P), [162] (per Meagher JA); Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548; Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 138. It is also appropriate to consider the object of the transaction between the parties; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 82 ALJR 419 at [8] (per Gleeson CJ).
As Bathurst CJ explained in Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605 at [15]:

It is well established that the question of whether the parties intended to bind themselves to a contract is to be determined objectively, having regard to the intention disclosed by the language the parties have employed: Masters v Cameron [1954] HCA 72; 91 CLR 353 at 362. In cases such as the present, which do not depend on the construction of a single document, what is involved is the objective determination of the question from the communications between the parties in their context and the parties’ dealings over the time leading up to the making of the alleged contract. This involves consideration of the subject matter of the communications: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550. As was said by Mahoney JA and McHugh JA in Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, that includes consideration of what the parties said or wrote (at 334, 337).

Oral contracts for the transfer of property will also need to be supported by valuable consideration, be certain in terms and comply with the Statute of Frauds requirement (as rendered applicable by ss 23C and 54A of the Conveyancing Act); Sharp v Anderson (1994) 6 BPR 97,510 at 7.

Onus of proof

As noted above, under s 37A(1) the Plaintiff bears the onus of proof of intent to defraud. The evidentiary onus may shift where a voluntary alienation is accompanied by circumstance such as those raised in Marcolongo v Chen at [24]-[25], but the legal onus remains squarely with Plaintiff.
In contrast, under s 37A(3) the onus lies on the person seeking protection of the defence, being the Defendant, to prove the alienation was in good faith, not having, at the time of the alienation, notice of the intent to defraud creditors; Wentworth v. Rogers & Anor. [2004] NSWCA 430 at [64]-[66] per Hodgson JA (with whom Santow JA and Hislop J agreed); B v U [2012] NSWSC 1416 at [12] per Pembroke J.

Credit of the witnesses

As will appear later in my judgment, a number of credit issues arose for determination.
In principle, a trial judge is not restricted in his or her assessment of a witness; he or she is not bound to accept all or any of that which the witness attests to. O’Loughlin J collected the authorities in Cubillo v Commonwealth (No 2) (2000) 103 FCR 1 at [118]-[123].
However, although judges are entitled to reject part or the whole of a witness's evidence, even if there has been no cross examination it is of course incumbent upon them to provide reasons for doing so. In any case where credibility is an important issue, the judge must give sufficient reasons so as to demonstrate he or she has not failed to use or has not palpably misused his or her advantage of first hand exposure in observing the witness; Beale v Government Insurance Office of NSW [1997] 48 NSWLR 430 at 445 per Meagher JA. Judges as do juries need to act reasonably and not perversely and capriciously in relation to accepting or rejecting a witness’s testimony; Christmas v Nicol Bros. Pty Ltd and Anor (1941) 41 NSWSR 317 at 322 per Jordan CJ; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) and Others (1999) 160 ALR 588 at 617 per Kirby J.
Further, in making assessments of credibility, trial judges should exercise restraint in drawing inferences too willingly from the demeanour of witnesses as they present in court. Primary deference should instead be given to contemporaneous documents. As noted by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy (2003) 214 CLR 118 at [30]-[31]:

30. It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in as appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”):

“... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.”
31. Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility.

Whilst it is simplistic and arguably erroneous for a trial judge solely to be influenced in his or her findings by contemporaneous documents, they will often have an extremely potent part to play in that process, especially when they were created against interest. If they appear of course to be self-serving they may need to be viewed with some care. Effective cross examination also will play an important part in assisting a judge to come to a view about the facts especially when inconsistencies are exposed which are not capable of rational explanation. In any fact finding exercise however a judge must always be astute in particular when drawing inferences carefully to distinguish in his or her mind between what is a reasonable inference as opposed to what may amount to no more than mere speculation; Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 222 per Samuels JA.
The rule in Browne v Dunn (1893) 6 R 67 (Browne v Dunn) may also be relevant to how a judge might assess a witness’s credibility. In this jurisdiction Hunt J subjected the rule in Browne v Dunn to his typically lucid analysis in Allied Pastoral Holdings Pty Ltd v Cmr of Taxation(Cth) [1983] 1 NSWLR 1 (Allied Pastoral) and concluded at 26:

I remain of the opinion that, unless notice has already clearly been given of the cross examiner’s intention to rely upon such matters, it is necessary to put to an opponent’s witness in cross examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings.

In Markem Corp v Zipher Ltd [2005] RPC 31 at 785-786 the Court of Appeal in the United Kingdom (comprising Kennedy, Mummery and Jacob LJJ) reemphasised the principle articulated in Browne v Dunn and approved Hunt J’s analysis in Allied Pastoral:

56. But there is a second ground which we consider first, namely that procedural fairness not only to the parties but to the witnesses requires that if their evidence were to be disbelieved they must be given a fair opportunity to deal with the allegation.
57. Prior to the hearing before us, we drew the attention of the parties to the decisions of the House of Lords in Browne v Dunn(1894) 6 R 67 and the Australian case of Allied Pastoral Holdings v FCT(1983) 44 ALR 607. One member of the court was aware that Australian practitioners were very alive to the rule in Browne v Dunn (so also, he has ascertained, are Canadian practitioners). The case reference and the Pastoral Holdings decision were supplied to him through the helpfulness of Justice Heerey of the Australian Federal Court.
58. Browne v Dunn is only reported in a very obscure set of reports. Probably for that reason it is not as well-known to practitioners here as it should be although it is cited in Halsbury for the following proposition:
Where the court is to be asked to disbelieve a witness, the witness should be cross examined; and failure to cross examine a witness on some material part of his evidence or at all, may be treated as an acceptance of the truth of that part or the whole of his evidence

Nonetheless, as noted by the Court of Appeal of the Supreme Court of New South Wales in Toben v Nationwide News Pty Ltd [2016] NSWCA 296 (comprising of Meagher, Ward and Payne JJA) at [58] Browne v Dunn is “a rule of fairness,” which may not extend to all evidence that is not cross examined. In Browne v Dunn, Lord Herschell noted at 71:

… Of course I do not deny for a moment that there are cases in which that notice has been so distinctly and unmistakably given, and the point upon which he is impeached, and is to be impeached, is so manifest, that it is not necessary to waste time in putting questions to him upon it. All I am saying is that it will not do to impeach the credibility of a witness upon a matter on which he has not had any opportunity of giving an explanation by reason of there having been no suggestion whatever in the course of the case that his story is not accepted.

Lord Herschell’s views were echoed by Tobias and McColl JJA in Ali v Nationwide News Pty Ltd [2008] NSWCA 183 at [112]:

There can be no doubt that where factual evidence is not cross examined upon, prima facie it should be accepted. However, it ought not necessarily be accepted where, as Tobias JA said in Multiplex, there is a credible body of evidence of a substantial character in direct contradiction of the non cross examined evidence. In the present case there is no such body of evidence.
(my emphasis)

The observations of McLelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 should also be at the forefront of judge’s assessments of witnesses recalling oral conversations:

Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
…
Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration.
…
What I have said above as to the cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act) is equally applicable, mutatis mutandis, to the causes of action based on contract and on equitable estoppel (with the added requirements, in the case of contract that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding, and in the case of equitable estoppel that any representation alleged was clear and unequivocal and was relied on to the substantial detriment of the representee).
(my emphasis)

There are a raft of difficulties in cases based on perception and reliance on spoken words, some of which have been alluded to by the then Chief Justice Spigelman, in "Truth and the Law" (2011) 85 (11) Australian Law Journal 746 (at 756-759), and in cases such as Pennimpede v Pennimpede [2009] NSWSC 85 at [29] per Bryson AJ and Murtagh v Murtagh [2013] NSWSC 926 at [105]-[109] per Hallen J. These difficulties are only amplified by the passage of time.
The rule in Jones v Dunkel (1959) 101 CLR 298 (Jones v Dunkel) may also play a role in the assessment of the probability of a witness being accepted. The Jones v Dunkel rule is a particular application of the general principle in the law of evidence that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted"; Blatch v Archer (1774) 1 Cowp 63 at [65] per Lord Mansfield. The statement of the rule in J D Heydon, Cross on Evidence, 9th ed (2013) LexisNexis Butterworths at [1215] was approved in R v Navarolli (2009) 194 A Crim R 96 by Muir JA at [2]:

[2] What is known as the Rule in Jones v Dunkel is summarised in Cross on
Evidence (Aust ed) as follows:
First, that unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence or produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party's case.

The rule can operate against a party who bears the onus of proof and against a party who does not; Ho v Powell (2001) 51 NSWLR 572 at [16] per Hodgson JA (with whom Beazley JA agreed).
The plurality (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) in ASIC v Hellicar (2012) 247 CLR 345 (ASIC v Hellicar) at [165]-[167] discussed the application of the rule in Jones v Dunkel:

165. Disputed questions of fact must be decided by a court according to the evidence that the parties adduce, not according to some speculation about what other evidence might possibly have been led. Principles governing the onus and standard of proof must faithfully be applied. And there are cases where demonstration that other evidence could have been, but was not, called may properly be taken to account in determining whether a party has proved its case to the requisite standard. But both the circumstances in which that may be done and the way in which the absence of evidence may be taken to account are confined by known and accepted principles which do not permit the course taken by the Court of Appeal of discounting the cogency of the evidence tendered by ASIC.
166. Lord Mansfield’s dictum in Blatch v Archer (1774) 1 Cowp 63 at 65 [98 ER 969 at 970 that “[i]t is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted” is not to be understood as countenancing any departure from any of these rules. Indeed, in Blatch v Archer itself, Lord Mansfield concluded (1 Cowp 63 at 65 [98 ER 969 at 970) that the maxim was not engaged for “it would have been very improper to have called” the person whose account of events was not available to the court.
167. This Court’s decision in Jones v Dunkel is a particular and vivid example of the principles that govern how the demonstration that other evidence could have been called, but was not, may be used. The essential facts of the case, though well known, should be restated. The personal representative of a driver who had died in a collision with another vehicle brought an action for damages on her own behalf and on behalf of the deceased driver’s dependants. The Plaintiffs’ case depended upon demonstration that the other driver’s negligence was a cause of the accident. The Plaintiff sought to demonstrate negligence by having the tribunal of fact (in that case a jury) infer from facts concerning the road and the two vehicles involved that the collision had occurred when the Defendant’s vehicle was on the wrong side of the road. One of the Defendants, the surviving driver, did not give evidence at the trial. The Court divided about whether the inference which the Plaintiff sought to have the jury draw about where the collision occurred was an inference that was open on the evidence. But the Court held (Jones v Dunkel (1959) 101 CLR 298 at 308 per Kitto J; see also at 312 per Menzies J; at 320-321 per Windeyer J.) “that any inference favourable to the Plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the Defendant and the evidence provides no sufficient explanation of his absence.”

Heydon J, in a separate judgment in ASIC v Hellicar at [232] made clear the rule in Jones v Dunkel does not extend to allowing inferences to be positively drawn that the absent witness’s evidence would have adversely affected the party who failed to call the witness:

…As the Court of Appeal said, two consequences can flow from the unexplained failure of a party to call a witness whom that party would be expected to call. One is that the trier of fact may infer that the evidence of the absent witness would not assist the case of that party. The other is that the trier of fact may draw an inference unfavourable to that party with greater confidence. But Jones v Dunkel does not enable the trier of fact to infer that the evidence of the absent witness would have been positively adverse to that party (HML v The Queen (2008) 235 CLR 334 at 437-438 [302]-[303]; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 385 [64]).

Another issue related to credit is the reaction (or lack thereof) of witnesses, and especially principal witnesses, to important events.
It is well established remaining silent when speech could have been expected, or failing to raise a matter in correspondence where the relationship between the parties is such that a particular reply might be expected, may amount to an admission, and is at least relevant evidence; Young v Tibbits (1912) 14 CLR 114 at 122 per Griffith CJ and 128 per Barton J; Lustre Hosiery Ltd v York (1935) 54 CLR 134 at 143 per Rich, Dixon, Evatt and McTiernan JJ; Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 at 230 per Gibbs CJ; Thomas v Hollier (1984) 156 CLR 152 at 157 per Gibbs CJ.
Not only may a failure to complain be instructive for determining whether a party relied on certain conduct (see, for example, Jones v Acfold Investments Pty Ltd (1984) 6 FCR 512 at 521–522 per Sheppard, Morling and Spender JJ (Full Fed Court) and Civoken Pty Ltd & Anor v Madden Grove Developments Pty Ltd & Ors [2006] VSC 283), but it may also adversely affect the credibility of a witness.
In Textralian Enterprises v Perpetual Trustees (Victoria) Ltd [2000] NSWCA 176, Heydon JA as he then was observed at [85]:

There were other grounds for the trial judge’s conclusions about Mr Slattery’s credibility. In many places he did appear argumentative, evasive and prone to volunteer material not responsive to the question. Under cross examination he sometimes gave potentially important evidence which would appropriately have appeared in his affidavits if it proceeded from genuine recollection. Mr Slattery also appeared to lack genuine recollection in other respects and to be defensive about answering without first having access to whatever document might help. In addition, there was a substantial lack of credibility in his assigning to the cinema centre and food court representations, whatever the detail of what was said, a central role in view of his years of failure to complain about non-compliance with them despite the many occasions on which it would have been appropriate to — not only 23 February 1993 (after Mr Slattery noticed disparities between the letter of offer and Mr Levin’s representations), not only occasions when LLPM’s pre-contractual and contractual documentation ought to have stimulated some statement about the representations, but also the many post-contractual occasions when Mr Slattery was remonstrating with LLPM about what he saw as its role in the losses which the shop was suffering.
(my emphasis)

With these legal principles in mind, I will now turn to the parties’ submissions on the law.

The parties’ submissions on the law

The parties’ submissions on the law centre on the following four issues:

When did the alienation take place?

Did Mr Lardis have intent to defraud creditors at the date of alienation?

Was Mrs Lardis a purchaser in good faith not having notice of any intent to defraud creditors at the date of alienation?

If s 37A does render the Dolls Point Property Transfer voidable, what order should be granted?

The parties’ responses to these issues are set out below. Reference to their submissions are as follows:

Plaintiffs’ Outline of Opening Submissions (Plaintiffs’ Opening Submissions)

Plaintiffs’ submissions regarding the use of the loan money (Plaintiffs’ Loan Submissions)

Plaintiffs’ Submission Regarding Certain Legal Issues (Plaintiffs’ Final Submissions)

Plaintiffs’ Submissions in Response to the Additional Final Submissions of the Second Defendant (Plaintiffs’ Additional Final Submissions)

Opening Outline for Argument for the Second Defendant (Defendant’s Opening Submissions)

Second Defendants’ Written Closing Submissions (Defendant’s Final Submissions)

Additional Final Submissions for the Second Defendant (Defendant’s Additional Final Submissions)

1. When did the alienation take place?

Defendant’s submissions: Early months of 2012

The Second Defendant contends the early months of 2012 is the crucial date for determining the intention of the parties, as this was when the Second Defendant purported to reach an enforceable agreement on the Dolls Point Property Transfer (Defendant’s Additional Final Submissions [19]).
In making this claim, the Second Defendant relies on the authorities of Green v Schneller [2002] NSWSC 671 and Mateo v Official Trustee (2002) 117 FCR 179 to characterise the alienation as a series of steps undertaken in order to affect a transfer. On this view, the alienation begins with the alleged agreement between the Defendants in the early months of 2012 and ends around the time of the execution and registration of the transfer on 24 January 2013.
As, on the Second Defendant’s view, the alienation cannot be isolated to an “instant in time” (Defendant’s Additional Final Submissions [9]), the early months of 2012 must be the date for ascertaining the intention of the alienation as a whole. Early 2012 (28 February on Mr Macaulay’s evidence and April/May on Mr Lardis’ evidence) was the time an enforceable agreement arose, and the steps that followed as part of the alienation were “in realisation and performance” of this agreement (Defendant’s Additional Final Submissions [20]).
The Second Defendant adds the oral nature of the early 2012 agreement does not offend the Statute of Frauds on several grounds. They claim s 23C Conveyancing Act is not applicable to the agreement in question because it is an agreement which creates an equitable interest that will later be transferred by conveyance. On these grounds, s 54A is submitted as the relevant provision, which presumes there is a relevant contract for the sale and disposition of the land (Defendant’s Additional Final Submissions [15]-[16]). The Plaintiffs were required to plead non-compliance to enliven the section, which they did not.

Plaintiffs’ submission: 29 January 2013, 21 November 2012, or, in the alternative, from early months of 2012 to 29 January 2013

Further, Mr Macaulay taking the call from Mr Lardis is again totally at odds with Mr Macaulay having referred this matter to Mr Koops in February. There is simply no explanation as to why Mr Koops is not contacted or why Mr Lardis made contract with Mr Macaulay, especially in light of Mr Macaulay’s “peripheral involvement” with the Lardis’. Mr Koops was, it seems, at PTW in September 2012 as he is referenced to in correspondence in 2013 in connection with the transfer (CB2/501).
In addition to these significant discrepancies in accounts, there are several other considerations which make it implausible in my view PTW was contacted again in late August/early September to affect a transfer they had been instructed to implement and had been the subject of an agreement between the Defendants in early 2012.
First, the email sent by Ms Hsu to Ms Kumar on 5 September to NAB (CB2/378) differs markedly from that which would be expected if what Mr Macaulay, or Mr and Mr Lardis said was true.
The terms of the email are obviously important, first, because on the email’s face, it is contrary to an account the bank required Mr Lardis to retain 1% in the Dolls Point Property so he could only transfer a 49% interest. The terms of the email do not suggest what was being spoken about was an NAB requirement. Rather the email purports on its face to indicate it was indeed a request, and an urgent one at that, by Mr Lardis. The terminology in my view of Ms Hsu’s email is odd if NAB had previously known about the arrangement and had already made it a requirement of the refinance. Further one would expect Ms Hsu had been instructed by Mr Lardis (with whom she had been in contact with since early 2012) and if what she said reflected those instructions no mention is made of an already existing requirement. There was no change in personnel from NAB’s position throughout 2012. Ms Kumar appears at all times as the point of contact at NAB.
One would have expected some record from NAB that it had previously set the requirement which their client/new customer was expected to comply with as part of the refinancing. In addition the second sentence of the email insofar as it purports to explain what the consequence would be of the transfer is suggestive of novelty. It is as I have said a letter in very odd terms if it were simply the regurgitation of an old request of an institution which had long ago not only agreed but imposed the very requirement and now seemingly sought once again. The only requirement NAB would appear to have requested was an up to date valuation to be paid for by Mr Lardis (CB2/393-396).
Further, such a request and the tone of the email as a whole is at odds with Mr Lardis having previously agreed with NAB and having instructed PTW accordingly on the Dolls Point Property transfer. There is no suggestion by PTW of any fault on their behalf for not acting on a transfer they were allegedly instructed on some months ago.
Last the statement “Michael would like to get this done as soon as possible” in the email betrays a sense of urgency not seen in any correspondence prior to September. Such a tone is consistent with the Lardis’ becoming increasingly anxious about possible adverse consequences in the winding up proceedings, and eager to shield their family home from such consequences.
In addition to this correspondence, what is also remarkable if the Second Defendant’s case were to be accepted, is that up until 5 September 2012, there is no record of Mr or Mrs Lardis making contact with PTW as to the Dolls Point Property Transfer. According to their version of facts, in early 2012 they gave instructions for their agreement to be implemented. Months and months went by before the transfer was ultimately prepared and implemented. Even if the transfer was contingent on first ensuring the loan over the Dolls Point Property was secured, over a month went by without the Lardis’ turning their minds to the transfer of the Property.
Their failure in my view plausibly to explain why they did not complain bitterly, given the significance of such an agreement, is telling. A tepid or desultory enquiry, if that is in fact what occurred, is hardly a plausible reaction in the circumstances. Mrs Lardis in her evidence said she was not “cranky” at PTW for the time lapse, she “just thought that’s how they work. It just takes a while for these things to happen” (T59/25-35). In my view I cannot accept that as truthful evidence. Neither she nor her husband were it seems bashful about their rights and yet the manner in which they purported to explain their reaction to PTW or NAB’s rather indifferent attitude towards their wishes was, in my view, implausible. As Mr Macaulay agreed, Mr Lardis was a client who would make a complaint if he was not content (T122/10-50). I do not accept prior to early September 2012 either Mr or Mrs Lardis made any contact with PTW to enquire what was happening.
The failure to complain, together with the tone and terms of the 5 September email, the total absence of any contemporaneous documents preceding this email that make any reference to the Dolls Point Property Transfer (be it 49% or 50%), and the inconsistent accounts of the witnesses make it clear, in my view, that late August/early September 2012 was the first time the Lardis’ agreed on and instructed PTW on the transfer of the Dolls Point Property.
I am also firmly of the view such an agreement can only be explained by the Lardis’ fear of adverse consequences arising out of the winding up proceedings. Just over a week before the 5 September email, on 28 August 2012, Mr Lardis had appeared in the Supreme Court of New South Wales for a timetable to be set for the winding up proceedings. Further, on the eve of the 5 September email, on 4 September Mr Lardis attended a conference with Mr M. Cleary (Counsel), Mr Koops and most likely Mr Wilks “to discuss Ted Lakis Supreme Court company wind-up application” and work on affidavit of Mr Lardis (CB6/1670). It is reasonable to infer discussion took place at this conference about the litigation and preparation for it, and Mr and Mrs Lardis, I am satisfied, were aware of the real risk of impending indebtedness arising out of the now imminent litigation if it ended adversely, and the possibility of being pursued by Amazon regarding allegations of impropriety that had been raised.
Against this backdrop, I am satisfied not only was early September the first time PTW was instructed by the Lardis’ to act on the 49% Dolls Point Property Transfer, but the instructions were provoked by the progress of the litigation and desire to protect the Dolls Point Property from the adverse consequences of the litigation by placing it beyond the reach of Mr Lakis in particular.
For completeness, it was put explicitly to Mr Lardis (T77/40-45, T104/15-20) and Mrs Lardis (T55/40-45), that early September was the first time the Defendants agreed upon a transfer of the Dolls Point Property and accordingly instructed PTW to act on it. They denied this but I reject their denials.

September – 29 January: The transfer process

The events following the 5 September email further confirm in my mind the Lardis’ only agreed upon, and instructed PTW on the 49% Dolls Point Property Transfer in early September 2012, and that the transfer was out of fear of the risk of adverse consequences of the winding up proceedings.
First, the correspondence that follows from the 5 September 2012 email continues to be tinged with a similar sense of urgency. Repeating her claim “Michael would like this done as soon as possible” in her 5 September email, on 11 September, Ms Hsu sent a follow up email to Ms Kumar asking her to advise on the bank’s requirements “as soon as possible” (CB2/381). Further on 10 October when Ms Hsu sends an email asking Mr Lardis if he was happy to proceed with the NAB valuer (CB2/397), Mr Lardis replies two minutes later saying “Yes go ahead I need this done asap” (CB2/398-399).
The recent nature of the instructions to act on the 49% Dolls Point Property Transfer is, in my view, also reflected in the 1 November email, where Ms Hsu, referring to the valuation of Dolls Point, confirms with Mr and Mrs Lardis the instructions that “you wish to transfer 49% of your interest to your wife where you will hold 1% and Athina will hold 99% as tenants in common” (CB2/443-446). The terms and tone of this email do not suggest, in my view, old instructions belatedly implemented.
This correspondence sits consistently with the 5 September 2012 email, and reinforces my view the 49% Dolls Point Property Transfer was only agreed upon and instigated in early September 2012, and then driven by a sudden urgency for the very purpose of protecting the Dolls Point Property from the imminent litigation and putting it beyond the reach of Mr Lakis at the least.
As set out in the background facts, following the timetable set by the Supreme Court on 28 August 2012, there was a directions hearing for the winding up proceedings (17 September 2012), the winding up proceedings commenced (7 November 2012), judgment was then handed down (14 December 2012), and a liquidator was appointed to Amazon (24 January 2013). Concurrently, following Mr Lardis’ approval of the NAB valuation (10 October 2012), the valuation of the Dolls Point Property was obtained (2 November 2012), and the transfer was executed (most likely on 21 November), signed (28 November) and lodged with the LPI (24 January 2013) and registered on (29 January 2013). I am satisfied the proximity of the winding up proceedings and the 49% Dolls Point Property Transfer serves to fortify my view the two were intimately linked, with the transfer carried out for the sole purpose of shielding the Dolls Point Property from adverse consequences arising from the winding up proceedings.
I also note I am not convinced any valuable consideration was exchanged for the 49% Dolls Point Property Transfer, notwithstanding the payment of stamp duty. The choice of the $1.00 consideration on the transfer form dated 24 January 2013 (CB2/493) bears no accurate reflection of the transaction as the Second Defendant would have it, but, I believe, does accurately reflect the transaction that transpired. The 49% Dolls Point Property Transfer, instigated in early September 2012, was independent of and carried out with a different intent to the refinancing of the Dolls Point Property, being the intent to put the Dolls Point Property beyond the reach of Mr Lakis in particular.

Failure to call witnesses

The failure on the part of the Second Defendant to call any of Mr Koops, Ms Hsu, Mr Kaloudis and/or Ms Kumar left a large part of the Second Defendant’s case uncorroborated. Indeed, it only fortified the negative impact of the contemporaneous materials that did exist.
With respect the PTW lawyers, it appears every relevant person within the firm, at least between February and September 2012, suffered from scriveners palsy. None kept a contemporaneous diary note of seemingly anything in relation to Mr and Mrs Lardis particularly in relation to the alleged relationship concerning the transfer. In the absence of contemporaneous records one would expect from a functioning law firm, it would have been instructive to hear from the lawyers who had engaged with the Lardis’ regarding the refinancing and the transfer, namely Mr Koops and Ms Hsu.
Ms Hsu appears to have acted for the Lardis’ as early as 29 February 2012 in relation to a loan agreement concerning a Titan Fitness (Coogee) (CB6/1630) and on the evidence is largely in charge of the transfer of the Dolls Point Property matter come September 2012, at times with Mr Saivanidis. Further, Ms Hsu was of course the author of the 5 September email that first records evidence of the Dolls Point Property Transfer.
Mr Koops appears to have acted for the Lardis’ as early as 9 March 2012 (CB6/1621). Mr Koops may have even been involved earlier, based on Mr Macaulay’s assertion members of the PTW property team already had “at least one other matter on foot” with the Lardis’ at the time of the alleged 28 February meeting (T113/40-50), and was acting for Mr Lardis as early as 24 May 2012 in the dispute regarding Amazon (CB1/124-125). Further, Mr Koops was, according to Mr Macaulay, the lawyer who received the critical instructions on 28 February 2012 to act on the transfer of the Dolls Point Property, yet failed to act on those instructions and ensure they were reflected in any costs agreement.
Further, on 29 January 2013, Ms Hsu and a copied in Mr Koops are the lawyers who inform Mr and Mrs Lardis the transfer of the property was complete. The flow on effect of Mr Koops and Ms Hsu not being called in all the circumstances has an impact on in my view on the position of Mr Macaulay. The failure to call Mr Macaulay’s professional colleagues who were intimately involved with Mr Lardis on his version of events suggests they could not have assisted Mr and Mrs Lardis’ narrative.
Mr Kaloudis as broker delivered services for some months in early 2012, and appears to be the prime actor conversing on behalf of the Lardis’ with NAB to affect the refinancing arrangements. Further, according to Mr Lardis, Mr Kaloudis was aware of the transfer of the Dolls Point Property at the time he was arranging the refinancing (T81/20-23).
Ms Kumar was similarly involved in the events leading up to the Dolls Point Property transfer, being the banker at NAB who acted on the loan applications, allegedly knew about the transfer arrangement by Mr Lardis at the time of the loan applications (T79/5-10), was most likely the person at NAB (if anyone) who required the transfer arrangement change from a 50% to a 49% transfer, allegedly told Mr Lardis in late August that NAB had not received paperwork from PTW, and who conversed with Ms Hsu from September 2012 to help affect the transfer from the bank’s side.
I am of the view it is open to me to infer that if called, none of these witnesses could have assisted in corroborating Mr Lardis and for that matter Mrs Lardis’ version of events and the alleged agreement said to have been forged in early 2012. This otherwise fortifies my view of the non-existence of the alleged agreement between Mr and Mrs Lardis regarding the transfer of the Dolls Point Property in early 2012.

Conclusion on facts

In summary I do not accept the evidence of Mr and Mrs Lardis that they came to the agreement to transfer the Dolls Point Property in the early part of 2012 as alleged, let alone as part an arrangement where Mrs Lardis would agree to the refinancing, and where NAB allegedly imposed the 1% requirement.
I can accept they discussed the refinancing of their facilities and retained Mr Kaloudis to arrange that for them. However, I do not accept the Lardis’ made any legally binding or other arrangement prior to the refinancing being implemented which made, as between themselves, the refinancing contingent upon the transfer by Mr Lardis of the whole of his interest or 49% of the interest in Dolls Point Property to his wife. As I have stated, I am satisfied the refinancing was the natural and probable consequence of life after Amazon for the Lardis’. In response to the Defendant’s Final Submissions, the drying up of Amazon cash flow explains why Mrs Lardis consented to “such a substantial amount of money being drawn down against the family home” (Defendant’s Final Submissions [18]). It follows then, that I cannot accept the Second Defendant’s submissions the monies purportedly advanced to Mr Lardis under the refinancing were in return for the 49% Dolls Point Property Transfer to Mrs Lardis.
On the basis of my analysis above I am satisfied Mr Lardis, together with Mrs Lardis first applied their minds to the question of the transfer of Mr Lardis’ interest in Dolls Point to Mrs Lardis in or about early September galvanised by the progress and imminence of the litigation and the fear of the real possibility of adverse consequences.
I am further satisfied while it may have been Mr Lardis’ initiative to hold on to the 1%, Mrs Lardis was not only privy, but critical, to the formation of the entire arrangement to remove the family home, as she saw it, from the reach of Mr Lakis at the very least as a result of the risk of adverse consequences flowing from the winding up proceedings.

Legal considerations

The relevant alienation of property

As I have already discussed s 37A confers jurisdiction on the court to avoid an alienation of property. The jurisdiction is enlivened where the alienation is made with the requisite intent which is to be assessed at the time of the relevant alienation.
A debate which took place before me is what is or should constitute the relevant alienation. In short my findings exclude any agreement as alleged. I shall return to this.
The High Court in Cardile v LED Builders at [65] confirmed the notion of “alienation” in the section means a parting with property and includes a parting with some interest in that property. It is accepted however not every agreement that relates to property is necessarily an alienation or an undertaking to alienate.
As is clear from the above there are competing positions in relation to what is the relevant alienation. Importantly of course having made my findings of fact at least on my appreciation of the situation any arrangement between Mr and Mrs Lardis by which he transferred the 49% interest in the Dolls Point Property did not emerge until early September and then in the context of litigation, long after the refinancing had been affected. The arrangement, as it was made then, did not manifest itself in writing until at least the signing of the transfer in November 2012 or perhaps the better view the registration transfer itself In January 2013. Even then the transfer is a nominal consideration rather than valuable consideration and therefore on the face of the documentation the transfer was a voluntary one. In the circumstances I consider that to be more realistic assessment of the facts.
It is submitted by the Plaintiffs, which I consider to be the preferable view, until registration on 29 January 2013 of the executed transfer no equitable interest in the property was conveyed prior to the date of registration. It is submitted by the Plaintiffs, again in my view correctly and consistent with Cardile, the relevant alienation was on 29 January.
So far as the transfer documents were concerned it is tolerably clear these were prepared for the first time on 1 November 2012. Mrs Lardis accepted in her affidavit she attended the offices of PTW “some time in November 2012”.
The Plaintiffs submit it is possible the transfer was executed at the meeting on 21 November, however suggests the more likely date is that it was signed on 28 November. This is not really controversial. It was thereafter lodged on 24 January 2014 and registered on 29 January. As I have already indicated, I am satisfied the Plaintiffs are correct in placing the relevant alienation at this date.
The Second Defendant submits the relevant alienation extended from the time of asserted oral agreement in early 2012 until the time when the registration of the transfer occurred. I do not accept that is an appropriate analysis of the legal position.
The Second Defendant relies upon a number of cases to support the proposition the “alienation” covered a wide period. On my findings this analysis is not really tenable. Properly understood however I do not think those authorities support that proposition. The particular cases referred to in the Second Defendant’s Additional Final Submissions ([2]-[22]) all include court orders of one sort or another. The equitable interests so identified in those cases stem from particular orders of courts in the various circumstances. The relevant transfer clearly arose first at the time of the orders on the basis the making of the orders amounted to a transfer of an equitable interest in the respective property. That is consistent with the principle namely the making of a court order requiring conveyance of a property creates a right to performance in hands of the transferee and could be so enforced. Understood in that way those authorities are entirely consistent with Cardile v LED Builders to which I have already referred.

Here of course there is no court order. In any event in my view the arrangement I have found in September could not create any binding contractual or other enforceable equitable interest.
I am therefore satisfied the 29 January 2013 is the relevant date of alienation for the purposes of s 37A.

Intent to defraud, hinder or delay and notice of intent

I am satisfied Mr Lardis transferred a 49% interest in the Dolls Point Property with an intent to defraud, hinder or delay prospective creditors of Amazon, including Mr Lakis. Further, I am satisfied Mrs Lardis was not just on notice of this intent, but shared this intent with her husband.
I do not accept the Second Defendant’s characterisation of the Plaintiffs’ case as largely relying on the decision of Black J on 14 December and events that followed to claim the 49% Dolls Point Property Transfer was in response to the orders of Black J. This is not correct. The pleaded factual context put forward by the Plaintiffs commences with the filing of the application for winding up proceedings on 17 July 2012 (ASOC [3]-[4]). Further, as the case developed, virtually the entirety of 2012 was the subject of examination by all the parties, with the 5 September email being a particular focus. The Second Defendant engaged in a similarly wide examination of events that allegedly transpired across 2012, which is obvious from her case in chief.
Likewise, I do not accept the Second Defendant’s contention neither Mr nor Mrs Lardis could have apprehended the likelihood claims could be pursued against Mr Lardis in favour of Amazon (see, for example Defendant’s Final Submissions [14]-[15], [30]). As early as 9 December 2011 Mr Lardis was aware Mr Lakis wanted to appoint forensic accountants to review Amazon’s books. By late 2011/early 2012 Mr Lardis noted both he and Mr Lakis were obtaining legal advice concerning their respective rights (ML1 [41]-[46]).The depth of ill feeling between the former partners was such that any form of conciliation was off the table. By early September Mr and Mrs Lardis were well aware of the progression of the litigation, with the timetable set in court on 28 August 2012. Mrs Lardis well understood her husband could be liable for costs (T48/15-25), and agreed that one asset which she knew would be protected if the court case went wrong was the Dolls Point Property (T55/15-35). Mr Lardis also understood serious allegations he had inappropriately taken money from Amazon were being made (T98/15-20) and there was a risk if the winding up proceedings did not go well he may have to pay money (T97/45-50). In other words, both Mr and Mrs Lardis understood by, at the latest September 2012, the likelihood of indebtedness arising out of the winding up proceedings and litigation that could follow, as a real possibility.
When Mr Lardis spoke to Ms Hsu, which it appears he did just prior to September 5, I am satisfied he clearly must have done so with his wife’ knowledge and agreement. Mr Lardis’ anxiety as I have already remarked in September is clearly a direct response to the litigation.
The Plaintiffs, again in my view correctly, submit by the second half of November 2012 Mr Lardis was well aware of all the allegations raised before Black J. Further, by the time of the hearing before Black J on 7 November 2012, the likelihood of further litigation was real, as was the risk of the Dolls Point Property being the subject of impending and significant recovery claims by Amazon and Mr Lakis.
As I have said, by early September 2012, and certainly by the date of the registration of the transfer on 29 January, Mr and Mrs Lardis in my view both intended one purpose of the transaction, indeed I am satisfied the only purpose, was to protect the Dolls Point Property from Mr Lakis at the very least. This was so plainly a joint enterprise on their part for that purpose.
For these reasons, I am satisfied the 49% Dolls Point Property Transfer is voidable under s 37A, and the Second Defendant has failed to satisfy me the elements of s 37A(3) have been made out.

The nature of any orders to be made

If relevant, I am prepared to hear the parties further as to the appropriate orders I should make in the light of my findings in accordance with the Second Defendant’s request (Defendant’s Additional Final Submissions [41]). In the result the parties should, if they wish to do so, have the matter relisted before me so further argument can be received on this issue and on any question of costs.

*******

Amendments

04 April 2017 - para [72] "a party" to "a parting"

para [74] "of land of an interest" to "of land or of an interest"

para [90] "no clear on authority" to "no clear authority", Gibb to Gibbs

para [96] Federal Court of Australia to Supreme Court of Norfolk Island

para [110] "a witness evidence" to "a witness's evidence"

para [112] Samuels J to Samuels JA

para [125] "may also may" to "may also"

Decision last updated: 04 April 2017

Medium Neutral Citation:	Edward Ted Lakis and Anor v Michael Victor Lardis and Anor [2017] NSWSC 321
Hearing dates:	1 and 2 February 2017, Plaintiffs’ and Defendant’s Final Submissions and Plaintiffs’ Loan Submissions 2 February, Defendant’s Additional Final submissions 13 February 2017, Plaintiffs’ Reply to Additional Final Submissions 20 February 2017
Decision date:	31 March 2017
Jurisdiction:	Common Law
Before:	Sackar J
Decision:	See paras [399] to [417]
Catchwords:	S 37A of the Conveyancing Act 1919 (NSW) - intention to defraud creditors – alienation of property – purchaser in good faith with no notice of intent – credit of witnesses – trial judge’s assessment of evidence in absence of cross examination – the rule in Jones v Dunkel
Legislation Cited:	Bankruptcy Act 1924 (Cth), s 121 Conveyancing Act 1919 (NSW), ss 7, 37A Conveyancing (Amendment) Act 1930 (NSW) Fraudulent Conveyances Act 1571 (Eng) (13 Eliz I, c 5) Law of Property Act 1925 (UK), s 172 Property Law Act 1969 (WA), s 87
Cases Cited:	Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26 Ali v Nationwide News Pty Ltd [2008] NSWCA 183 Allied Pastoral Holdings Pty Ltd v Cmr of Taxation (Cth) [1983] 1 NSWLR 1 Ashton v Pratt [2015] NSWCA 12 ASIC v Hellicar (2012) 247 CLR 345 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 B v U [2012] NSWSC 1416 Barling v Bishopp (1860) 29 Beav. 417 Barton v The Deputy Federal Commissioner of Taxation (1974) 131 CLR 370 Beale v Government Insurance Office of NSW [1997] 48 NSWLR 430 Blatch v Archer (1774) 1 Cowp 63 Browne v Dunn (1893) 6 R 67 Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 Christmas v Nicol Bros. Pty Ltd and Anor (1941) 41 NSWSR 317 Civoken Pty Ltd & Anor v Madden Grove Developments Pty Ltd & Ors [2006] VSC 283 Cubillo v Commonwealth (No 2) (2000) 103 FCR 1 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Ex parte Mercer, in re Wise (1883) 17 Q.B.D 290 Fox v Percy (2003) 214 CLR 118 Green v Schneller [2002] NSWSC 671 Ho v Powell (2001) 51 NSWLR 572 In re Symon: Public Trustee v Symon [1944] SASR 102 In the matter of Amazon Pest Control Pty Limited [2012] NSWSC 1568 Ingram v Y Twelve [2013] NSWSC 1777 International Air Transport Association v Ansett Australia Holdings Ltd (2008) 82 ALJR 419 John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 Jones v Acfold Investments Pty Ltd (1984) 6 FCR 512 Jones v Dunkel (1959) 101 CLR 298 Jones v Sutherland Shire Council [1979] 2 NSWLR 206 Langdon v Gruber [2001] NSWSC 276 Lustre Hosiery Ltd v York (1935) 54 CLR 134 Marcolongo v Chen (2011) 242 CLR 546 Markem Corp v Zipher Ltd [2005] RPC 31 Murtagh v Murtagh [2013] NSWSC 926 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 Pavlovic v Universal Music Australia Pty Limited (2015) 90 NSWLR 605 Pennimpede v Pennimpede [2009] NSWSC 85 Prentice v Cummins (No 5) (2002) 124 FCR 67 PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 R v Navarolli (2009) 194 A Crim R 96 Re Amazon Pest Control Pty Ltd [2016] NSWSC 609 Re Cummins; Richardson v Cummins (1951) 15 ABC 185 Re Trautwein; Richardson v Trautwein (1944) 14 ABC 61 Regal Castings Ltd v Lightbody [2009] 2 NZLR 433 Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 Sharp v Anderson (1994) 6 BPR 97,510 Silvera v Savic (1999) 46 NSWLR 124 Singh v Singh [2009] WASCA 53 Smith v Edward [2006] NFSC 11 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) and Others (1999) 160 ALR 588 Stileman v Ashdown (1742) 2 Atk. 477 Taylor v Jones 2 Atk. 600 Textralian Enterprises v Perpetual Trustees (Victoria) Ltd [2000] NSWCA 176 Thomas v Hollier (1984) 156 CLR 152 Toben v Nationwide News Pty Ltd [2016] NSWCA 296 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 Trustees of Cummins v Cummins (2006) 227 CLR 278 Twyne’s Case (1601) 76 ER 809 Watson v Foxman (1995) 49 NSWLR 315 Wentworth v. Rogers & Anor. [2004] NSWCA 430 Young v Tibbits (1912) 14 CLR 114
Texts Cited:	J D Heydon, Cross on Evidence, 9th ed (2013) LexisNexis Butterworths Henry May, May on Fraudulent and Voluntary Conveyances, 3rd ed. (1908) Hon JJ Spigelman AC, "Truth and the Law" (2011) 85 (11) Australian Law Journal 746
Category:	Principal judgment
Parties:	Edward Ted Lakis (First Plaintiff) Amazon Pest Control Pty Ltd (In Liq) ACN 092 833 531 (Second Plaintiff) Michael Victor Lardis (First Defendant) Athena Lardis (Second Defendant)
Representation:	Counsel: R Newlinds SC, N Bender (Plaintiffs) C Birch SC, B De Buse (Second Defendant) Solicitors: Clayton Utz (Plaintiffs) McGrath Dicembre & Company (Second Defendant)
File Number(s):	2016/256494
Publication restriction:	N/A