Johnson v Leader Computers Pty Ltd

[2014] SASCFC 14

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

JOHNSON v LEADER COMPUTERS PTY LTD; JOHNSON v SYNNEX AUSTRALIA PTY LTD

[2014] SASCFC 14

Judgment of The Full Court

(The Honourable Justice Sulan, The Honourable Justice Anderson and The Honourable Justice Blue)

5 February 2014

REAL PROPERTY - TORRENS TITLE - OFFENCES AND OTHER MATTERS

RESTITUTION - GENERAL PRINCIPLES

CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - CREATION OF RELATIONSHIP OF AGENCY

The appellants Mr and Mrs Johnson were sued in the District Court by the respondents for declarations that a transfer by Mr Johnson to Mrs Johnson of his half interest in their residential property was made to defraud his creditors and was void pursuant to section 86 of the Law of Property Act 1936 (SA). The respondents were creditors of Mr Johnson pursuant to director’s guarantees given by him in respect of the indebtedness of Arcom Computers Pty Ltd.

The Johnsons’ principal defence at trial was that the transfer of the residential property was made in partial discharge of loans by Mrs Johnson to Mr Johnson being monies paid by the Johnson Superannuation Fund to Arcom.  In the alternative, the Johnsons claimed that the payments gave rise to a restitutionary claim by Mrs Johnson against Mr Johnson.

The trial Judge granted judgment in favour of the respondents and made declarations that the transfer was void pursuant to the Act. The trial Judge rejected the evidence of the Johnsons that there were any loans by Mrs Johnson to Mr Johnson and held that in the circumstances no restitutionary claim by Mrs Johnson against Mr Johnson arose.

Mrs Johnson appeals against the declarations granted by the trial Judge.  She does not challenge the trial Judge’s conclusion that there were no loans by Mrs Johnson to Mr Johnson.  However, she contends that the trial Judge erred in rejecting the Johnsons’ restitution case and in rejecting the Johnsons’ contention that a transfer of property in favour of a creditor is incapable of being made with intent to defraud creditors merely because it prefers one creditor over other creditors.  Mrs Johnson contends that the trial Judge wrongly imposed an additional requirement over and above a request by Mr Johnson that Mrs Johnson pay Arcom, namely that Mr Johnson personally benefit from the payment.

Held per Blue J (Sulan and Anderson JJ agreeing) (dismissing the appeals):

1.       In a cause of action in restitution for monies paid at the request of the defendant, there is no independent element that the defendant received a benefit as a result of the payment.  However, the trial Judge did not so hold and her reference to benefit was merely part of her consideration of whether the defendant made a request in his personal capacity (at [81]-[83]).

2.       The trial Judge’s unchallenged finding that there was no loan by Mrs Johnson to Mr Johnson encompassed a finding and necessarily entailed that the loan was by Mrs Johnson directly to Arcom.  On the unchallenged findings of the trial Judge, the request…