Matthews v Nilant; Nilant v Matthews - [2002] FMCA 201

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MATTHEWS v NILANT & ORS
NILANT & ORS v MATTHEWS

[2002] FMCA 201

BANKRUPTCY – Whether transfer of bankrupt’s half interest in property contravenes s.120 and/or 121 of the Bankruptcy Act 1966 – solvency – intent – conduct and knowledge of bankrupt relevant – failure to prove solvency – no basis upon which s.139(7)ZQ notice should be set aside – declaration granted.

PRACTICE AND PROCEDURE – Bankruptcy – appropriate form of orders where trustee claim under ss.121 and 122 of Bankruptcy Act successful – advocacy certificate pursuant to Federal Magistrates Court Rules O 21 R 15 – costs up to and including decision on form of orders – notification pursuant to s.120(6) of Bankruptcy Act to Bank not necessary.

Bankruptcy Act 1966, ss.120, 120(3), 120(5)(d), 120(6), 121
Home Building Contracts Act 1991, s.4

Sandell v Porter (1966) 115 CLR 666
Taylor v Carroll (1991) 6 ACSR 255
Taylor v ANZ Banking Group (1988) 13 ACLR 780
Calzaturificio Zenith Pty Ltd (in liq) v NSW Leather & Trading Co Ltd (1970) VR 605
Totterdell v Nicol-Burmeister (1995) 13 ACLC 1521
Cannane v J Cannane Pty Ltd (in liq) (1998) 28 ACSR 603
Ex parte Russell (1882) 19 Ch. D 588
Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515
Re Brechin, ex parte Putin and Stokes (A’asia) Pty Ltd (1986) 12 FCR 184
Halse as trustee of the property of Payne a bankrupt v Norton (1997) 76 FCR 389
McVeigh v Zanella (2000) FCA 1890
Milpurrurru & ors v Indofurn Pty Ltd & ors (1994) 130 ALR 659

File No:

WZ19 of 2001

Applicant:

NOLA JANET MATTHEWS

Respondents:

CHARLES PHILLIPE LOUIS NILANT, OREN ZOHAR AND PETER FREDERICK PREBBLE

File No:

WZ36 of 2001

Applicants:

CHARLES PHILLIPE LOUIS NILANT, OREN ZOHAR AND PETER FREDERICK PREBBLE

Respondent:

NOLA JANET MATTHEWS

Delivered on:

10 September 2002

15 November 2002 (Perth)

Delivered at:

Melbourne (by video link)

Hearing Date:

14, 15 and 16 November 2001

15 November 2002

Judgment of:

McInnis FM

REPRESENTATION

File No WZ19/01

Counsel for the Applicant:

Mr L Christensen

Solicitors for the Applicant:

Tottle Christensen

Counsel for the Respondents:

Mr I Morison

Solicitors for the Respondents:

Jackson McDonald

File No WZ36/01

Counsel for the Applicant:

Mr I Morison

Solicitors for the Applicant:

Jackson McDonald

Counsel for the Respondent:

Mr L Christensen

Solicitors for the Respondent:

Tottle Christensen

ORDERS

In application WZ19 of 2001 -

The application filed 19 April 2001 be dismissed.

In application WZ36 of 2001 -
IT IS DECLARED that —

The transfer dated 7 August 1996 whereby Lynthorne James Matthews transferred to the respondent the whole of his estate, title and interest in the property situated 49A Reserve Street, Bicton, in the state of Western Australia being the whole of the land comprised in certificate of title volume 1792 folio 626 (the property) is void as against the applicants.

The respondent holds one undivided half share of the property on trust free of all encumbrances save for the mortgage G247957 granted…

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.

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Details

Case: [2002] FMCA 201
Decision Date: 10 September 2002 15 November 2002 (Perth)

CaseChat Overview and Summary

Matthews and Nilant were the parties involved in the dispute, which was heard in the Federal Magistrates Court. The primary contention was over the validity of a property transfer from Lynthorne James Matthews to Nilant, and the subsequent financial arrangements between the parties. Matthews sought to have the transfer voided and to determine the financial obligations between the parties. Nilant opposed these claims, defending the transfer's legitimacy and the financial arrangements.

The court had to determine whether the property transfer was valid and if Nilant held the property on trust for Matthews. It was also necessary to ascertain the financial obligations of each party, particularly in relation to a mortgage held by the Commonwealth Bank of Australia. The court considered the evidence and arguments presented by both parties to resolve these issues.

The court found that the transfer of the property was indeed void against Matthews. It ruled that Nilant held one undivided half share of the property on trust for Matthews, with the existing mortgage securing only a specific sum against Matthews' share. The court detailed the financial obligations and responsibilities of each party, ensuring clarity in their respective entitlements and liabilities. It also ordered that Matthews could sell the property and that Nilant must indemnify Matthews for any excess mortgage liability. The court further directed the execution of necessary documents to facilitate the sale and ordered Nilant to pay Matthews' costs.

The court's final orders included declaring the property transfer void, ordering the sale of the property, indemnifying Matthews for any excess mortgage liability, and directing Nilant to pay Matthews' costs. These orders were designed to ensure that Matthews' interests were protected and that the financial arrangements between the parties were clarified.

Orders

Orders of the court

In application WZ19 of 2001 -

The application filed 19 April 2001 be dismissed.

In application WZ36 of 2001 -

IT IS DECLARED that —

The transfer dated 7 August 1996 whereby Lynthorne James Matthews transferred to the respondent the whole of his estate, title and interest in the property situated 49A Reserve Street, Bicton, in the state of Western Australia being the whole of the land comprised in certificate of title volume 1792 folio 626 (the property) is void as against the applicants.

The respondent holds one undivided half share of the property on trust free of all encumbrances save for the mortgage G247957 granted by the respondent to the Commonwealth Bank of Australia which should be deemed to secure the sum of $56,809.26 against the applicants' one undivided half share.

IT IS ORDERED:

That the applicants be at liberty to sell the property and receive the net proceeds of sale upon trust for the parties with liberty to apply as to the proper allocation of those funds.

The respondent shall execute all such documents and do all such things that are necessary to enable the applicants to effect sale of the property.

The respondent indemnify the applicants from and against any liability under mortgage G247957 in excess of the sum of $56,809.26.

I grant a certificate of advocacy to counsel for the applicants pursuant to order 21 rule 15 of the Federal Magistrates Court Rules.

The respondent shall pay all of the applicants' costs including any reserved costs of actions WZ19 of 2001 and WZ36 of 2001 as costs in the same action to be taxed pursuant to Order 62 of the Federal Court Rules upon the Federal Court Scale.

The parties have liberty to apply for any further directions or orders as may be required to give effect to these declarations and orders.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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