Lyons v Weston as trustee of the Estate of Lyons - [2019] FCCA 477

FEDERAL CIRCUIT COURT OF AUSTRALIA

LYONS & ANOR v WESTON AS TRUSTEE OF THE ESTATE OF LYONS & ANOR

[2019] FCCA 477

Catchwords:
BANKRUPTCY – Administration of property – Contribution of bankrupt and recovery of property – Recovery of property from party to transaction where void against trustee – Notice.

BANKRUPTCY – Administration of property – Effect of bankruptcy on antecedent transactions – Undervalued transactions and settlements – Other matters.

BANKRUPTCY – Administration of property – Effect of bankruptcy on antecedent transactions – Transfers to defeat creditors and fraudulent dispositions – Transfer or disposition of property.

Legislation:

Bankruptcy Act 1966, ss.120(1), 121(1), 121(4), 139ZQ(1), 139ZQ(2), 139ZS

Abeyratne v Latour [2009] FMCA 688
Anscor Pty Ltd v Clout (Trustee) 135 FCR 469
Camm v Linke Nominees Pty Ltd (2010) 190 FCR 193
Halse v Norton (1997) 76 FCR 389
Re Pearson; Ex parte Wansley v Pearson (1993) 46 FCR 55

First Applicant:

DANIEL LYONS

Second Applicant:

BRADLEY JAMES LYONS

First Respondent:

PAUL GERARD WESTON AS TRUSTEE OF THE ESTATE OF TONY CHARLES LYONS

Second Respondent:

OFFICIAL RECEIVER

File Number:

BRG 116 of 2016

Judgment of:

Judge Jarrett

Hearing date:

1 September 2016

Date of Last Submission:

1 September 2016

Delivered at:

Brisbane

Delivered on:

28 February 2019

REPRESENTATION

Counsel for the Applicants:

Mr Shaw

Solicitors for the Applicants:

CLO Lawyers Pty Ltd

Counsel for the Respondents:

Mr Cochrane

Solicitors for the Respondents:

Owen Hodge Lawyers

ORDERS

Pursuant to s.139ZS of the Bankruptcy Act 1966 (Cth) the notice to the applicants pursuant to s.139ZQ(1) of the Bankruptcy Act dated 17 September, 2015 be set aside.
Subject to any submissions from either party to be made in writing within seven (7) days of the delivery of this judgment, direct that:
(a)by the date no more than twenty-one (21) days after the delivery of these orders, any application for costs be notified by one party to the other by the filing and service of written submissions specifying:
(i)the precise orders for costs sought and any alternatives;
(ii)the argument in support of each order; and
(iii)whether that party is desirous of any oral hearing of the costs issue; and
(b)by the date no more than forty-two (42) days after the delivery of these orders, the respondent to any such application shall file and serve written submissions specifying:
(i)the precise orders sought by the respondent;
(ii)the argument in support of the response; and
(iii)whether that party is desirous of any oral hearing of the costs issue.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 116 of 2016

DANIEL LYONS

First Applicant

BRADLEY JAMES LYONS

Second Applicant

And

PAUL GERARD WESTON AS TRUSTEE OF THE ESTATE OF TONY CHARLES LYONS

First Respondent

OFFICIAL RECEIVER

Second Respondent

REASONS FOR JUDGMENT

By s.139ZQ(1) of the Bankruptcy Act 1966 (Cth) the Official Receiver may give a notice under that subsection requiring a person who has received any property as a result of a transaction that is void against the trustee of the estate of a bankrupt, to pay to 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.

Continue reading Lyons v Weston as trustee of the Estate of Lyons

Details

AGLC: Lyons v Weston as trustee of the Estate of Lyons [2019] FCCA 477
Case: [2019] FCCA 477
Decision Date: 28 February 2019

CaseChat Overview and Summary

The proceeding concerned an application by the trustee in bankruptcy of the estate of Mr. Lyons for an order that certain property, specifically a half-interest in a property at 145 Old Northern Road, Middle Ridge, be vested in the trustee. The respondent, Ms. Weston, was the trustee of the estate of the late Mr. Lyons, who was the bankrupt. The dispute arose from a transfer of the property interest by the bankrupt to his wife, Ms. Lyons, shortly before his bankruptcy.

The primary legal issue before the court was whether the transfer of the half-interest in the property from the bankrupt to his wife was void as against the trustee in bankruptcy. This involved determining whether the transfer constituted a disposition of property made with the intent to defeat or delay creditors, or whether it was an undervalue transaction that could be recovered by the trustee. The court also considered the effect of any notice Ms. Lyons may have had regarding the bankrupt's financial position or intentions at the time of the transfer.

Judge Jarrett found that the transfer of the property interest was made by the bankrupt with the intention of defeating or delaying his creditors. The court applied the principles of bankruptcy law concerning antecedent transactions, particularly section 120 of the *Bankruptcy Act 1966* (Cth), which allows a trustee to recover property disposed of for less than its market value or for the purpose of preventing property from becoming divisible among the bankrupt's creditors. The court was satisfied that the bankrupt's intention was to place the property beyond the reach of his creditors, and that Ms. Lyons was aware of this intention or had reason to believe it.

The court ordered that the half-interest in the property at 145 Old Northern Road, Middle Ridge, be vested in the respondent, Ms. Weston, as trustee of the estate of the bankrupt.

Orders