FEDERAL CIRCUIT COURT OF AUSTRALIA
| MORRIS FINANCE LTD v HODGES & ANOR | [2018] FCCA 3235 |
| Catchwords: BANKRUPTCY – Administration of property – Property available for payment of debts – Property not divisible amongst creditors – Trade or professional equipment or property used in earning income by personal exertion WORDS AND PHRASES – Void – Voidable |
| Legislation: Bankruptcy Act 1924-1950, s.94 Bankruptcy Legislation Amendment Bill 1996 (Cth) |
| Applicant: | MORRIS FINANCE LTD |
| First Respondent: | DARRELL RAYMOND HODGES |
| Second Respondent: | NICK JIM COMBIS AS TRUSTEE OF THE BANKRUPT ESTATE OF DARRELL RAYMOND HODGES |
| File Number: | MLG 225 of 2016 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 26 August 2016 |
| Date of Last Submission: | 26 August 2016 |
| Delivered at: | Brisbane |
| Delivered on: | 9 November 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Webster |
| Solicitors for the Applicant: | Smith Leonard Fahey Lawyers |
| Counsel for the Respondent: | Mr West |
| Solicitors for the Respondent: | Fallu McMillian Lawyers |
ORDERS
The parties bring in short minutes of orders to give effect to these reasons within 21 days of the date of these order.
Any applicant for an order for costs shall file and serve written submissions in support of any such application within 21…
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- Case
- [2018] FCCA 3235
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the Court was whether the Toyota Hilux and the John Deere tractor constituted "tools of trade" or "equipment used in earning income by personal exertion" within the meaning of section 116(2)(c) of the *Bankruptcy Act 1966* (Cth), and therefore were not divisible among the respondent's creditors. The applicant contended that the vehicles were not of a kind that could be considered tools of trade or essential equipment for personal exertion, arguing they were more akin to general assets of a business.
Judge Jarrett considered the purpose of section 116(2)(c), which is to allow a bankrupt to continue earning a living after bankruptcy. The Court found that the nature of the respondent's contracting business, which involved earthmoving and general contracting work, necessitated the use of both the utility vehicle for transport and general site work, and the tractor for specific earthmoving tasks. His Honour concluded that both the Toyota Hilux and the John Deere tractor were essential for the respondent to earn income by personal exertion in his chosen field, and thus fell within the exemption provided by section 116(2)(c).
Consequently, the Court ordered that the 2017 Toyota Hilux dual cab utility and the 2017 John Deere tractor were not divisible among the creditors of the respondent.
Orders
Orders of the court
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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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