Grapple Pay Pty Ltd v Conroy

In Grapple Pay Pty Ltd v Conroy, the plaintiff, a company, advanced funds to the defendant company, Grapple Pay Pty Ltd. The director of the defendant company guaranteed the company’s obligations both in his own right and as trustee of a trust. The sole asset of the trust was a block of land. On the day that Grapple Pay Pty Ltd entered voluntary administration, the director transferred the land to his mother, the first defendant. Shortly thereafter, the director became bankrupt, and the second defendant was appointed as his trustee in bankruptcy. The plaintiff subsequently sought a declaration that the transfer of the land to the first defendant was void due to an intent to defraud creditors and sought an order for the land to be vested in the plaintiff.

The court was required to determine whether the property was transferred for valuable consideration and whether it was transferred with the intent to defraud creditors. The court was also required to decide if the first defendant was a purchaser in good faith without notice of any intent to defraud creditors. Additionally, the court had to consider whether purported addendums to the trust instrument correctly appointed the first defendant as the trustee of the trust and if a third party was appointed as the trustee.

The court found that the transfer of the land to the first defendant was not for valuable consideration and was made with the intent to defraud creditors. The court held that the first defendant was not a purchaser in good faith as she was aware of the director’s financial difficulties and the impending administration of the company. The court also found that the purported addendums to the trust instrument did not correctly appoint the first defendant as the trustee of the trust. Instead, the court determined that a third party was appointed as the trustee of the trust. The court made an order vesting the property in the plaintiff and declared the transfer of the land to the first defendant void.