Hedditch, Noel Wynyard Ex Parte Dunn, Robert George - [1984] FCA 296

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,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1984] FCA 296
Decision Date: 26 SEPTEMBER 1984

CaseChat Overview and Summary

The case of Ex Parte Dunn involves Noel Wynyard Hedditch, who was declared bankrupt, and Robert George Dunn, the trustee in bankruptcy. The trustee applied to the court to have certain payments made by Hedditch to his wife declared void, alleging that they constituted preferences under the Bankruptcy Act 1966. The payments in question were made shortly before Hedditch's bankruptcy and the trustee argued that they were not made in good faith or in the ordinary course of business.

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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