Re: NOEL WYNYARD HEDDITCH
Ex Parte: ROBERT GEORGE DUNN and HAZEL IRENE HEDDITCH
No. 208 of 1982/X
84 ATC 4683
Bankruptcy
COURT
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY
Fox J.
CATCHWORDS
Bankruptcy - Application by trustee to have payments from the debtor to his wife declared void - alleged preference - whether payments were made in good faith and in the ordinary course of business.
Bankruptcy Act 1966 - ss.120, 122.
HEARING
SYDNEY
#DATE 26:9:1984
ORDER
Noel Wynyard Hedditch paid -
(a) $77,734.68 to the respondent by cheque number 785757 dated 9 August 1982, drawn on the account of E.S. Hedditch with the Bank of New South Wales on or about 9 August 1982:
(b) $298171.03 to the respondent by cheque number 480819 dated 20 August 1982, drawn on the account of Denniston & Day with the Commonwealth Trading Bank of Australia on or about 20 August 1982;
(c) $12,488.48 to the respondent by cheque number 480800 dated 17 August 1982, drawn on the account of Denniston & Day with the Commonwealth Trading Bank of Australia on or about 20 August 1982.
Each of the payments referred to in Order 1. above are void as against the trustee, as being preferences.
THE COURT ORDERS THAT:
The respondent pay to the applicant the sum of $119,394.19 and interest thereon.
The respondent pay the applicant's costs of this application.
JUDGE1
This is an application by a trustee appointed under Part X of the Bankruptcy Act 1966 ("the Act") as trustee of a deed of assignment for declarations and orders respecting three payments made by the debtor to the respondent, his wife, prior to the execution of the deed, which occurred on 6 October 1982.
It is claimed that each payment was void as against the trustee as being a settlement under s.120 of the Act, or a preference under s.122. The payments in question are described in the application as follows:
"(a) $77,734.68 to the respondent by cheque number 785757 dated 9th August, 1982 drawn on the account of E.S. Hedditch with the Bank of New South Wales on or about 9th August, 1982.
(b) $29,171.03 to the respondent by cheque number 480819 dated 20th August, 1982 drawn on the account of Denniston & Day with the Commonwealth Trading Bank of Australia on or about 20th August 1982."
A claim is also made for a declaration that real estate, being the respondent's interest in the land comprised in Certificate of Title Volume 2884 folio 98, and known as 4 Beatty Street, Southport, Queensland is held in trust for the applicant, and an order is sought that the interest be transferred to the applicant.
The defences raised are those appearing in the language of the relevant sections, namely, as to s.120, that the money payments did not involve settlements of property, and in any event, that the settlements were made in good faith and for valuable consideration,…
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- Case
- [1984] FCA 296
- Decision Date
CaseChat Overview and Summary
The central legal issue before the court was whether the payments made by Hedditch to his wife were indeed preferences under the Bankruptcy Act. The court had to determine if these payments were made in good faith and in the ordinary course of business. This involved examining the nature and timing of the payments, as well as the relationship between Hedditch and his wife at the time.
The court found that the payments were indeed preferences and thus void against the trustee. It concluded that the payments were not made in good faith or in the ordinary course of business, as they were made to a close family member within a short period before the bankruptcy. The court was satisfied that the payments were not part of any legitimate business transaction but rather an attempt to place the wife's assets beyond the reach of the trustee and creditors.
The court ordered that the payments made by Hedditch to his wife be declared void. Additionally, the respondent, Robert George Dunn, was ordered to pay the applicant, the trustee, the sum of $119,394.19 plus interest. Dunn was also ordered to pay the applicant's costs of the application.
Orders
Orders of the court
Noel Wynyard Hedditch paid -
(a) $77,734.68 to the respondent by cheque number 785757 dated 9 August 1982, drawn on the account of E.S. Hedditch with the Bank of New South Wales on or about 9 August 1982:
(b) $298171.03 to the respondent by cheque number 480819 dated 20 August 1982, drawn on the account of Denniston & Day with the Commonwealth Trading Bank of Australia on or about 20 August 1982;
(c) $12,488.48 to the respondent by cheque number 480800 dated 17 August 1982, drawn on the account of Denniston & Day with the Commonwealth Trading Bank of Australia on or about 20 August 1982.
Each of the payments referred to in Order 1. above are void as against the trustee, as being preferences.
THE COURT ORDERS THAT:
The respondent pay to the applicant the sum of $119,394.19 and interest thereon.
The respondent pay the applicant's costs of this application.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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