Posner v Chen - [2007] FMCA 394

FEDERAL MAGISTRATES COURT OF AUSTRALIA

POSNER v CHEN

[2007] FMCA 394

BANKRUPTCY – Transfer of property by bankrupt – alleged loan agreements – alleged irretrievable breakdown of marriage – separation and divorce in China – loan agreements shams – no consideration for transfer – no irretrievable breakdown of marriage – intention to defeat creditors – transfer void as against trustee.

Australian Citizenship Act, 1948 (Cth)
Bankruptcy Act, 1966 (Cth), ss.120, 121
Evidence Act, 1995 (Cth), ss.55, 56
Federal Court Rules, o.62
Property Law Act, 1926 (WA), s.126
Transfer of Land Act, 1893 (WA)

Henderson v Amadio Pty Ltd (No.1) (1995) 62 FCR 1
Jones v Dunkel (1959) 101 CLR 298
Matthews v Nilant [2002] FMCA 201
Sharment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449
Trustee of the Property of Cummins (A Bankrupt) v Cummins (2006) 3 ABC(NS) 814; [2006] HCA 6
Warwick Entertainment Centre Pty Ltd v McKenzie & Anor [2006] WASCA 280

Applicant:

MELVIN MALCOLM POSNER AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF RONGBIN CHEN

Respondent:

XIAO JING CHEN

File number:

PEG 81 of 2006

Judgment of:

Lucev FM

Hearing date:

20 September 2006

Date of last submission:

20 September 2006

Delivered at:

Perth

Delivered on:

23 March 2007

REPRESENTATION

Counsel for the Applicant:

Mr K. Yin

Solicitors for the Applicant:

Murcia Pestel Hillard

Respondent:

Appeared in person

DECLARATIONS AND ORDERS

The court declares that:

the transfer of land registered on 6 September 2002 by Rongbin Chen to the Respondent (Xiaojing Chen) of his interest in the land described as Lot 220 on Plan 9055 and being the whole of the land comprised in Certificate of Title Volume 382 Folio 113A (and otherwise known as 56 Gummery Street, Bedford, Western Australia) (“the Bedford Land”) is void against the Applicant under sections 120(1)(b) and 121(1) of the Bankruptcy Act, 1966 (Cth);
the Applicant and Respondent are the beneficial owners of the Bedford Land as tenants in common with effect from 28 April 2004.

AND THE COURT ORDERS THAT:

the matter be adjourned to a directions hearing at 11.00 am on 2 April 2007 for such further directions, orders or declarations as may be required.
The Respondent pay the Applicant’s costs (including reserved costs) if not agreed, to be taxed under the Federal Court Rules, 0.62.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG 81 of 2006

MELVYN MALCOLM POSNER AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF RONGBIN CHEN

Applicant

And

XIAOJING CHEN

Respondent

REASONS FOR JUDGMENT

Under a Re- Amended Statement of Claim (“the Application”) filed with the Court on 3 August 2006 the Applicant seeks relief under ss.120 and 121 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”).
The relief sought relates to land situated at Lot 222 on Plan 9055, being the whole of the land comprised in Certificate of Title Volume 382 Folio 113A, commonly known as 56 Gummery Street, Bedford (“the Bedford Land”).
The Applicant is the trustee in bankruptcy of Rongbin Chen…

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 Posner v Chen

Details

AGLC: Posner v Chen [2007] FMCA 394
Case: [2007] FMCA 394
Decision Date: 23 March 2007

CaseChat Overview and Summary

This case involves an application by Melvin Malcolm Posner, as trustee in bankruptcy of Rongbin Chen, seeking relief under the Bankruptcy Act 1966 (Cth). The Applicant seeks relief in relation to a property located at Lot 222 on Plan 9055, known as 56 Gummery Street, Bedford. The Applicant claims that Rongbin Chen, the Bankrupt, transferred his interest in the property to Xiaojing Chen, the Respondent, without providing the agreed consideration of $147,500. The Applicant argues that the Respondent's claims of loans and a divorce are false and that the transfer was intended to defeat creditors.

The Court found that the loan agreements between the Bankrupt and the Respondent were shams, and that there was no evidence of an irretrievable breakdown of the relationship or a separation between the parties. The Court also concluded that the transfer was intended to defeat creditors. As a result, the Court declared the transfer void against the Applicant under sections 120(1)(b) and 121(1) of the Bankruptcy Act. The Court further declared that the Applicant and Respondent are the beneficial owners of the property as tenants in common from 28 April 2004. The Respondent was ordered to pay the Applicant's costs if not otherwise agreed. The matter was adjourned to allow for discussions between the parties to reach an agreement on further orders.

Orders