Hill & Anor v Reglon Pty Limited

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.