Mansfield v Ghadie - [2008] FMCA 1489

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MANSFIELD v GHADIE & ANOR

[2008] FMCA 1489

BANKRUPTCY – Settlement of Real Property Transaction shortly before sequestration order – full contract price for properties not paid – application by Trustee for orders for monetary judgment, interest and costs – declarations that bankrupt had a vendor’s lien; that lien vested in the trustee; and the trustee is entitled to an order for sale.

Bankruptcy Act 1966 (Cth) ss.120, 121, 122, 181A

Davies v Little John (1923) 34 CLR 174
Fitz-Gibbon v Khoury (Unreported, Supreme Court of New South Wales Equity Division, Powell J, 1 March 1985)
Hewett v Court (1983) 57 ALJR 211
Lysaght v Edwards (1876) 2 Ch D 499
Reliance Finance Corporation Pty Ltd v Heid & Anor [1982] 1 NSWLR 466

Applicant:

DAVID IAN MANSFIELD AS TRUSTEE OF THE BANKRUPT ESTATE OF SALIBA HANNA GADIEH

First Respondent:

ELIAS GHADIE

Second Respondent:

JOHN ELIAS GHADIE

File number:

SYG 3242 of 2007

Judgment of:

Lloyd-Jones FM

Hearing date:

26 June 2008

Delivered at:

Sydney

Delivered on:

31 October 2008

REPRESENTATION

Counsel for the Applicant:

Mr Cutler

Solicitors for the Applicant:

Access Business Lawyers

First Respondent:

No appearance

Second Respondent:

No appearance

ORDERS

Short minutes of order be prepared and placed before the Court on Friday 7 November 2008.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 3242 of 2007

DAVID IAN MANSFIELD AS TRUSTEE OF THE BANKRUPT ESTATE OF SALIBA HANNA GADIEH

Applicant

And

ELIAS GHADIE

First Respondent

JOHN ELIAS GHADIE

Second Respondent

REASONS FOR JUDGMENT

The proceedings

The further amended application filed in Court on 12 February 2008 seeks the following orders:
1. The first respondent pay interest on the principal sum of $118,039.50 from 2 February 2006 to the date of payment in accordance with section 51A of the Federal Court of Australia Act 1976.
2. The second respondent pay interest on the principal sum of $67,695.06 from 2 February 2006 to the date of payment in accordance with section 51A of the Federal Court of Australia Act 1976.
3. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the First Respondent is void against the applicant pursuant to s.120 of the Bankruptcy Act, 1966.
4. A declaration that that the transfer of the real property being Lot 2 in Deposited Plan 1091424 from the Bankrupt to the Second Respondent is void against the Applicant pursuant to s.120 of the Bankruptcy Act, 1966.
5. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the First Respondent is void against the Applicant pursuant to s.121 of the Bankruptcy Act, 1966.
6. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the Second Respondent is void against the applicant pursuant to s.121 of the Bankruptcy Act, 1966.
7. A declaration that the transfer of the real property being Lot 1…

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 Mansfield v Ghadie

Details

AGLC: Mansfield v Ghadie [2008] FMCA 1489
Case: [2008] FMCA 1489
Decision Date: 31 October 2008

CaseChat Overview and Summary

Mansfield v Ghadie was a case heard in the Federal Court of Australia where the applicant sought to recover monies owed to them as well as to declare various property transfers void under the Bankruptcy Act 1966. The applicants were trustees in bankruptcy who sought to enforce their rights under sections 120, 121, and 122 of the Bankruptcy Act 1966. The applicants argued that the respondents had obtained property from a bankrupt in circumstances that made the transfers void against the applicant. The applicants also sought interest on the principal sums owed from 2 February 2006 and a declaration that the applicants, as trustees, were entitled to liens over the properties in question.

The legal issues before the court included whether the transfers of real property from the bankrupt to the respondents were void under sections 120, 121, and 122 of the Bankruptcy Act 1966, whether the applicants were entitled to interest on the principal sums owed, and whether the applicants, as trustees, were entitled to liens over the properties. The court had to determine if the transfers were voidable preferences or void gifts, and if the applicants were entitled to the relief sought. The court also needed to decide on the appropriate interest rate to be applied to the principal sums and whether the applicants were entitled to the liens and the sale of the properties to satisfy the debts owed.

The court held that the transfers of the properties from the bankrupt to the respondents were indeed void under sections 120, 121, and 122 of the Bankruptcy Act 1966. The court found that the transfers constituted voidable preferences and void gifts. The court also held that the applicants were entitled to interest on the principal sums owed from 2 February 2006 at the rate of 2% per annum above the bank bill rate. Furthermore, the court declared that the applicants, as trustees, were entitled to liens over the properties and ordered that the properties be sold and the proceeds applied in satisfaction of the amounts owed. The court also ordered that the respondents pay the applicants' costs of the proceedings.

In summary, the Federal Court of Australia granted the applicants' claims, declaring the transfers void and ordering the sale of the properties to satisfy the debts owed. The court also ordered interest on the principal sums and the payment of costs.

Orders

Orders of the court

Short minutes of order be prepared and placed before the Court on Friday 7 November 2008.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The further amended application filed in Court on 12 February 2008 seeks the following orders:1. The first respondent pay interest on the principal sum of $118,039.50 from 2 February 2006 to the date of payment in accordance with section 51A of the Federal Court of Australia Act 1976.2. The second respondent pay interest on the principal sum of $67,695.06 from 2 February 2006 to the date of payment in accordance with section 51A of the Federal Court of Australia Act 1976.3. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the First Respondent is void against the applicant pursuant to s.120 of the Bankruptcy Act, 1966.4. A declaration that that the transfer of the real property being Lot 2 in Deposited Plan 1091424 from the Bankrupt to the Second Respondent is void against the Applicant pursuant to s.120 of the Bankruptcy Act, 1966.5. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the First Respondent is void against the Applicant pursuant to s.121 of the Bankruptcy Act, 1966.6. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the Second Respondent is void against the applicant pursuant to s.121 of the Bankruptcy Act, 1966.7. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the First Respondent is void against the Applicant pursuant to s.122 of the Bankruptcy Act, 1966.8. A declaration that the transfer of the real property being Lot 1 in Deposited Plan 1091424 from the Bankrupt to the Second Respondent is void against the applicant pursuant to s.122 of the Bankruptcy Act, 1966.9. A declaration with respect of the contract for sale of land dated 16 January 2006 between Saliba Hanna Gadieh and the First Respondent, that Saliba Hanna Gadieh is an unpaid seller in the amount of $118, 039.50 and is entitled to a lien over the property situate at 20 Albury Street, Yagoona NSW 2199.10. A declaration that, upon the Applicant’s appointment as trustee in bankruptcy of Saliba Hanna Gadieh, the said lien (with respect to 20 Albury Street) vest in the applicant.11. An order that 20 Albury Street, Yagoona be sold and the proceeds applied in satisfaction of amounts owing to the applicant.12. A declaration, with respect of the contract for sale of land dated 16 January 2006, between Saliba Hanna Gadieh and the second respondent, that Saliba Hanna Gadieh is an unpaid seller in the amount of $67,695.06 and is entitled to a lien over the property situate at 20A Albury Street, Yagoona NSW 2199.13. A declaration that, upon the applicant’s appointment as trustee in bankruptcy of Saliba Hanna Gadieh, the said lien (with respect to 20A Albury Street) vest in the applicant.14. An order that 20A Albury Street, Yagoona be sold and the proceeds applied in satisfaction of amounts owing to the applicant.15. The first and second respondents pay the applicant’s costs of these proceedings.16. Such further or other orders in respect of the sale as this Honourable Court thinks fit.