PT Garuda Indonesia Ltd v Grellman

Re: P.T. GARUDA INDONESIA LIMITED
And: RICHARD JOHN GRELLMAN
No. G215 of 1991
FED No. 232
Bankruptcy
(1992) 107 ALR 199

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox(1), Gummow(1) and Von Doussa(1) JJ.

CATCHWORDS

Bankruptcy - Application by trustee to declare transactions void - repayment by bankrupt to his employer of $100,000 previously stolen by him - transfer to employer of bankrupt's house - effect of notice to employer of claims against bankrupt by other persons - nature of required proof of bankrupt's fraudulent intent - significance of fact that transactions favoured a person who was already a creditor of the bankrupt - whether transaction is void if made to defeat future creditors - burden of proof that disponee took in good faith and for valuable consideration - nature of "good faith" - significance of agreement by employer not to prosecute bankrupt if restitution made

Bankruptcy Act 1966, s.121

HEARING

#DATE 4:5:1992

Counsel for the appellant: Mr C Darvall QC with Mr B Skinner

Solicitor for the appellant: Alderice and Clarke

Counsel for the respondent: Mr P M Biscoe QC with Ms H Coonan

Solicitor for the respondent: Abbott Tout Russell Kennedy

ORDER

Time for filing the cross-appeal be extended to 2 October 1991.

The appeal be dismissed.

The cross-appeal be dismissed.

The appellant pay to the respondent:

(a) the whole of the costs incurred by him which were thrown away by the adjournment of the hearing of the appeal on 2 October 1991; and

(b) one half of his other costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The respondent is trustee of the bankrupt estate of the Paul Anthony Simpson ("Mr Simpson"). A sequestration order was made against the estate of Mr Simpson on 9 August 1986. The act of bankruptcy relied upon was a failure to comply with a bankruptcy notice in respect of a judgment of the Supreme Court of New South Wales for loss and damage to certain premises and chattels from a fire which had been deliberately caused by Mr Simpson on or about 13 October 1985. Judgment was entered against Mr Simpson on 29 April 1986 for a sum which, together with costs, was $496,529.18. In his statement of affairs completed on 1 September 1986, Mr Simpson recorded assets of $3,500. At the time of the institution of the present proceedings, no funds had been received in his estate.

1. Between 1976 and 1983, Mr Simpson had been employed as an accountant by the appellant ("Garuda"). The respondent's case at trial was that during his period of employment Mr Simpson misappropriated some $250,000 from Garuda. In October 1985, during police inquiries into the fire, Mr Simpson and his wife contacted Garuda, admitted the misappropriation, and agreed with Garuda that if the money were repaid Garuda would not report the misappropriation to the police. Then followed two transactions which the respondent contended were…