Re Bennett, J.L. v Ex Parte Nimmo Pastoral Co

[1992] FCA 62

3UDGMENT No. ~~ . . . JC I 'L ,

THE FEDERAL COURT OF A U S T R A L 1 4

U N E W D I V I S I O N l

No. Q91792 of 1991

W K R U P T C Y D I S T R I C T OF THE

OF OUEENSLNiR

RE !

EX PARTE:  PIMMO PASTORAL COMPANY (a f i m l

MINUTES OF ORDER

JUDGE W I N G ORDER!	Spender J.
DATE OF ORDER!	3 February 1992
WHERE MAD48	Brisbane

C O W DECLARES THAT:

The transfer by J.L. Bennett of the property in
September 1990 to A . L . Bennett is void as against

the Trustee, D . W. Knight.

THE COURT ORDERS THAT:

A.L. Bennett transfer the property to D.W. Knight forthwith.

124 of the Bankruptcy Rules.

Settlement and entry of orders is dealt with in Rule

IN THE FEDERAL COURT OF AUSTRALIA 1 ,

GENERAL D I V I S I O N ) No. QB1792 of 1991

RE	8 -
EX PARTE:	fJIMMO PASTORAL COMPANY fa firm1

GQI lwt	Spender J.
EI&!z*	Brisbane

m?3: 3 February 1992

EX TEMPORE REASONS FOR JUDGMENT

This is an application on behalf of Desmond William Knight the trustee of the estate of John Leslie Bennett. A sequeetration order was made against the estate of John Leslie Bennett on 8 August 1991.

The application concerns the transfer by Mr Bennett of
real property described as Preferential Pastoral Holding No.

02/3373 on Lot 3373 on Plan PH2111, Land Agents District of

Barcaldin~ on or about 19 September 1990 to Mrs Alieon Lindsay

Bennett, the wife of Mr John Bennett.

The application is based on the provisions of e. 120

of the Bankru~tcv Act 1966 which provides:

" (I) A aett.lement of property, whether made before

or after the conlmenceni-nt of this Act, not being

-

(a)	a settlement made before and in
co~lsf derati on of marriage, or made in favour
o f a purchaser or encumbrancer i h good	fa i th
and for valuable considerati on: or

(b)	a settlement made on or for the spouse or
children o f the set t1 or o f property that has
accrued t o the se t t lor a f t e r marriage i n
right o f the spouse o f the se t t lor ,

i s , i f the se t t lor becomes a bankrupt and the

settlement came in to operation a f t e r , or within

2 years before, the commencement o f the

bankruptcy, void as against the trustee i n the

bankruptcy.

( 2 ) A settlement o f property,

whether made before

or a f t e r the commencement o f t h i s Act,

not being

a settlement referred to i n paragraph ( l ) ( a ) or

( b ) or a settlement t h a t i s void as against the

trustee by reason o f the operation o f that subsection, i s , i f the se t t lor becomes a bankrupt and the settlenrent came in to operation a f t e r , or within 5 years before, the comntencement o f the bankruptcy, void as against the trustee i n the bdnkrktptcy, unless the parties clainting ~lnder the settlement prove -

( a )	that the se t t lor was, a t the time o f making the eettlement, able t o pay 611 h i s debts without the a i d o f the property comprised i n the settlement: and
(b)	passed t o the trustee o f the settlement or

the s e t t f o r ' s interest i n the property

to the donee under the settlenrent on i t s
execution.

that

( 3 ) A covenant or contract made, whether before or

a f t e r the commencement o f t h i s Act, i n

consideration o f marriage ei ther -

( a ) for the future payment o f money t o the

se t t lor le spouse or children; or

for the future settlement o f property on or being money or property i n which the se t t lor d i d not, a t the d a t e o f the marriage, have any estate or in teres t , Whether vested or contingent, i n possession of. remainder, and not being nroney or property o f , or i n right o f , the se t t lor ' s spouse, i s , i f the se t t lor becomes a bankrupt and the covenant or contract was executed a f t e r the conmencement o f the bankruptcy, void as against the trustee i h the bankruptcy. for the aet t lor 's spouse or children,

( b )

contract may claim for dividend i n the se t t lor ' s ( 4 ) The persons ent i t led under the covenant or

bankruptcy under the covenant or contract, but such

a claim shall be postponed until a l l claims o f the

other creditors (including claims for interest on i n teres t -bear1 ng debts i n respect o f a period a f t e r the date o f the bankruptcy b u t not including claims under subsection 139H(1) have been sa t i s f i ed .

( 5 ) A payment o f money or transfer o f property made

by the se t t lor i n pursuance o f such a covenant or contract, whether before or a f t e r the commencement o f t h i s Act i s void as against the trustee i n the se t t lor ' s bankruptcy, unless the persons to whom

the payment or transfer kas made prove -

f a )	that the payment or transfer was made more than 2 years before the commencement o f the bankruptcy;
fb )	that a t the date o f the payment or transfer
the se t t lor was able t o pay a l l h i s debts
w i thout the a i d o f the money so paid or the
property so transferred: or
( C )	that the pdyment or transfer was made i n
pursuance o f a covenant or contract, to pay or transfer money or property expected t o come t o the se t t lor from, or on the death o f , a particular per5on named i n the
covenant or contract and was made within 3 months a f t e r the money or property came in to the possession or under tile control o f the se t t lor .
property i s void a s agdinst the trustee i n the	( 6 ) Where any such payment o f money or transfer o f
se t t lor ' s bankruptcy by virtue o f subsection ( 5 ) , the persons t o whom the payment was made or the
property was transferred are ent i t led t o claim for dividend Under the covenant or contract as i f i t
bankruptcy. had not been ekecuted a t the conunencement o f the

( 7 ) Nothing i n t h i s section shall be taken t o

a f f e c t or prejudice the t i t l e or interest o f a person who ha^, i n mod fa i th and for valuable consideration, purchased or acquired from the persons ent i t led t o the benefi t o f the settlement, covenant or contract or from the trustee o f the settlement, covenant or contract or an interest i n settlement the money or property the subject o f the

that money or property.

( 8 ) In t h i s rrecti on, "settlement o f property" "

includes any dicrposi t ion o f property.

The property ie a pastoral property in the Barcaldine dietrict called l~Hotepur**	and ie of the order of
31 square kilometres.

The application eeeks an order that Mrs Allieon Bennett forthwith transfer the property to the trustee and, ae filed, sought an order that Mre Bennett pay the truetee'e coete of an incidental to this application and a tranefer of the property to the truetee.

The act of bankruptcy on which the petition wae founded occurred on 10 December 1990 when Mr Bennett failed to comply with a bankruptcy notice dated 31 October 1990 served upon him on 24 November 1990. The creditor's petition on which the eequeetration order was made waa preeented on 6 June 1991. The application ie not baeed on B. 121 of the -otcv A c t which deals with fraudulent disposition.

The clear consequence of the chronology of evente outlined above ie that the tranefer of "Hotspur" by Mr Bennett to hie wife made on about 5 September 1990 ie a settlement of property, which is not a eettlement of the kind referred to in e. 121(a) or (b), but ie a settlement which came into operation within two yeara before the commencement of the bdnkruptcy of Mr Bennett. AB a consequence it ie void againet the trustee in the bankruptcy.

5   l

It is clear on the material before me that Mrs Bennett is quite unable to meet any order fvl- costs should the court make any euch order. The costs of this application eeem to me properly to be costs in the admfnietration by Mr Knight of the estate of Mr Bennett.

In those circumstances the orders that 1 make are as follows: I declare that the transfer by John Lealie Bennett of the real property described as Preferential Pastoral Holding No. 02/3373 on Lot 3373 on Plan PH2111, Land Agents District of Barcaldine on or about September

1990 to Allison Lindeay Bennett is void as against the

trustee Deemond Wj 1 i am Knight pursuant to s . 120 of the

&&&ruvtcv Act 1966.

I order that Aliaon Lindsay Bennett transfer the

property to the trubtee Desmond William Knight forthwith.

I c e r t i f y t h a t t h i s and t h e

preceding f ive ( 5 ) pages are a t r u e c o p y of t h e reasons f o r

judgment here in of hi S Honour

J u s t i c e J . E . J . Spender ,

Counsel for the Peti tioning Credl tor:	Mr. R. S. Litster
instructed by:	Sly X Weigall, Cannan
& Petrrson
The Debtors:	Mr. J.  L. Bennett and
Mrs. A.L. Bennett
appea  r ed for
themselves.
Date of Hearing:	3 February 1992
Date of Judgment;	3 February 1992