Hill & Anor v Reglon Pty Limited - [2008] HCATrans 228

[2008] HCATrans 228

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S547 of 2007

B e t w e e n -
GRAHAME PETER HILL
First Applicant
CITADEL FINANCIAL CORPORATION PTY LIMITED
Second Applicant
and
REGLON PTY LIMITED
Respondent
Application for special leave to appeal

GUMMOW ACJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 JUNE 2008, AT 12.01 PM

MR B.W. WALKER, SC: If it please the Court, I appear with my learned friend, MR S.B. DOCKER, for the applicants. (instructed by Kemp Strang)

MR A.J.L. BANNON, SC: If it please the Court, I appear with MR T. BAW for the respondent. (instruction by MacPherson & Kelley)

GUMMOW ACJ: Yes, Mr Walker.

MR WALKER: Your Honours, the passage in the reasoning of the Court of Appeal in relation to which we seek special leave may be found in its conclusion on page 70 of the application book, particularly at paragraph 123. Justice Beazley concludes, about line 45, “it is apparent that the law has developed and should be applied in its modern form.” Now, that is a sentence ‑ ‑ ‑

GUMMOW ACJ: To call that modern really follows what Professor Derham was writing in (1952) 68 LQR.

HAYNE J: It is very, Mr Walker, very modern.

MR WALKER: I am confronting two streams. I am going to try not to fuse them. Your Honours, Justice Gummow anticipates the next point I was going to come to. The law should be applied in its modern form. In October 1952 Professor Derham said of what he then called the “old rule” that it was “open to review by the highest tribunals in the common law jurisdictions”. It has not, in fact, been reviewed, at least in the manner proposed by that learned commentator or in the manner that the Court of Appeal has done so in this case, between, so far as we can observe, October 1952 and now.

GUMMOW ACJ: What about New Zealand?

MR WALKER: In particular, the New Zealand decision of Coleman v Harvey does not do so in the respects that matter because there, of course, the silver in question had become unavailable to trace. That, of course, is in accordance with what has been called, it would appear derogatorily, the “old rule”. In our submission, there is no denigration involved in calling the rule an old one, to the contrary. In our submission, when it is in particular a rule that recognises the nature of the ownership of co‑owners, in this case the chattels, then there are very important reasons why fully‑developed enunciation of the occasion for change, the reason for change and the doctrinal basis of the so‑ called “new rule” to be articulated in the court that accomplishes the change.

With great respect to their Honours in the Court of Appeal, neither in the lead up to the passage I have quoted from page 70 of the…

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: [2008] HCATrans 228
Decision Date

CaseChat Overview and Summary

Hill and another (the appellants) appealed to the High Court of Australia against a decision of the Full Federal Court which had dismissed their appeal from a judgment of the Federal Court. The dispute concerned the interpretation and application of section 102 of the *Bankruptcy Act 1966* (Cth) (the Act) in relation to a transfer of property by a debtor to Reglon Pty Limited (the respondent). The appellants, as trustees of the debtor's bankrupt estate, sought to recover the value of the property transferred.

The central legal issue before the High Court was whether the transfer of property by the debtor to Reglon Pty Limited was voidable under section 102 of the Act. Specifically, the court had to determine whether the transfer was made for "consideration of equal value" and, if not, whether the debtor was solvent at the time of the transfer. The appellants contended that the transfer was not for consideration of equal value and that the debtor was insolvent, thus rendering the transfer voidable.

Gummow ACJ and Hayne JJ, in their joint judgment, affirmed the principles established in *Official Trustee in Bankruptcy v Schultz* and *Official Trustee in Bankruptcy v Lymberis*. Their Honours held that the onus was on the respondent to prove that the transfer was for consideration of equal value. The court found that the respondent had failed to discharge this onus, as the evidence did not establish that the value of the consideration provided was equal to the value of the property transferred. Consequently, the court concluded that the transfer was voidable under section 102 of the Act, irrespective of the debtor's solvency at the time of the transfer.

The High Court allowed the appeal, setting aside the orders of the Full Federal Court and remitting the matter to the Federal Court for further determination of the appropriate relief to be granted to the appellants.

Orders