Lo Pilato (Trustee) v Kamy Saeedi Lawyers Pty Ltd, in the matter of Adzic (Bankrupt)

The case of Lo Pilato (Trustee) v Kamy Saeedi Lawyers Pty Ltd, in the matter of Adzic (Bankrupt) [2021] FCAFC 103, dealt with a claim by the trustee in bankruptcy, Mr Lo Pilato, against the Adzic Family Trust and Kamy Saeedi Lawyers Pty Ltd, in relation to the transfer of real property by the bankrupt debtor, Mr Adzic, within two years of his bankruptcy. The legal issues at the heart of the case revolved around whether the transfer of the property was void against the trustee in bankruptcy under various sections of the Bankruptcy Act 1966 (Cth), and whether the payment made for the property was below market value. The court also had to determine if the transfer was made with the intention to defraud or defeat creditors. Furthermore, the case examined whether the charging clauses and guarantees in the costs agreements were fair and reasonable, and whether they should be set aside under the Legal Profession Act 2006 (ACT).

The Full Court of the Federal Court of Australia found that the transfer of the property was indeed void against the trustee in bankruptcy under sections 120 and 121 of the Bankruptcy Act 1966 (Cth). The court held that the consideration for the purchase of the property was below market value at the time of transfer. However, the court determined that Mr Lo Pilato was not entitled to any consequential relief as the property had been transferred to a third party who acquired it in good faith and for value. The court also held that the payment of $229,879.14 made by Mr Adzic to Kamy Saeedi Lawyers Pty Ltd was not made on behalf of his company, Redevelopments, and therefore, the claim against the Law Firm failed. The court found that the charging clauses and guarantees in the costs agreements should not be set aside under the Legal Profession Act 2006 (ACT).

The final orders of the court were that the third respondent, Kamy Saeedi Lawyers Pty Ltd, pay the applicant's costs, the application against the first respondent, the Adzic Family Trust, be dismissed, and the applicant, Mr Lo Pilato, pay the first respondent's costs.