Re Jacka, J.N. v Ex parte The Official Trustee in Bankruptcy
[1988] FCA 150
•10 Mar 1988
C A T C H W O R D S
BANKRUPTCY - trust formed in anticipation of bankruptcy - held a
sham - held bankrupt beneficial owner of moneys in trust.
Bankruptcy Act 1966, ss.116, 120, 121
Re: Joy Naoml Jacka
Ex Parte: The Offlcial Trustee in BankruptcyQld E781 of 1985
IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION
) QLD E781 of 1985 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: JOY NAOMI JACKA
Bankrupt
M PARTE: THE OFFICIAL TRUSTEE IN BANKRUPTCY (as trustee of the estate of JOY NAOMI JACKA, a Bankrupt) Applicant
KAREN BEVERLEY McMILLAN
Flrst Respondent
TANGERINE PTY LIMITED
Second Respondent
SHELLEY LU JACKA
Third Respondent
PINCTJS J. 10 MARCH 1988 REASONS €OR JUDGMENT
The Officlal Trustee in Bankruptcy applles for
declarations and orders whlch may be generally descrlbed as belng
attempts to recover property alleged to have been disposed of by
the bankrupt In anticlpation of her bankruptcy. The bankrupt attained that status by presenting her own petition on 24 October 1985. The respondents to the trustee's appllcation, apart from the bankrupt herself, are two daughters, Karen Beverley McMillan IN THE FTDERAL COURT OF AUSTRALIA ) GENERAL DIVISION
) QLD E781 of 1985 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF OUEENSLAND )
RE: JOY NAOMI JACKA Bankrupt
EX PARTE: THE OFFICIAL TRUSTEE IN BANKRUPTCY (as
trustee of the estate of JOY NAOMI JACKA, a Bankrupt) Applicant
KAREN BEVERLEY McMILLAN
First Respondent
TANGERINE PTY LIMITED
Second Respondent
SHELLEY LU JACKA
Thlrd Respondent
MINUTES OF ORDER
PINCUS ORDER: MAKING JUDGE J.
DATE OF REASONS: 10 MARCH 1988 DATE OF ORDER: 1988 8 APRIL
| BRISBANE | MADE: | WHERE |
| THE COURT: |
1. DECLARES that the land described as Lot 411 on Reglstered Plan No. 151590, County of Ward, Parish
of Gilston, containing 840 sqm and being land
contained in Certificate of Title Volume 5595 Folio 247 is beneficially owned by the Applicant Trustee subject to registered Bill of Mortgage No. H528536;
AM) ORDERS that the said property vest in the
Applicant Trustee forthwith subject to the said mortgage;
AND FURTHER that the mortgagee, the National
Australla Bank Limited, forthwith in conjunctlon
with the Applicant Trustee lodge the said
Certificate of Title with the Registrar of Titles
to enable the Applicant Trustee to be registered as Registered Proprietor;
2. DECLARES that the land described as Lot 441 on Registered Plan No. 181204 County of Ward, Parish
of Gllston, containing 924 sqm and being land contamed in Certificate of Title Volume 6271 Follo
68 is beneflcially owned by the Applicant Trustee
sub~ect to the Registered Bill of Mortgage No. H499036 and sub~ect to a charge in favour of Shelley Lu Jacka in the sum of four thousand seven
hundred and eighty dollars ($4,780.00);
AND ORDERS that the said property vest in the
appllcant Trustee forthwith subject to the said
mortgage and the sald charge;
AND FURTHER that the mortgagee, The Assoclates Pty.
Ltd., forthwlth I n conjunction wlth the Applicant
Trustee, lodge the said Certlflcate of Title wlth
the Reglstrar of Tltles to enable the Appllcant
Trustee to be registered as Registered Proprletor; 3 .
DECLARES that the moneys standing to the credit of
account No.: 007-820-8768 in the name of "Lena
Brown" with the Metropolltan Permanent Building Soclety, constltute property divisible amongst the credltors of the Bankrupt pursuant to s.116 of the Bankruptcy Act 1966;
AND ORDERS that all such moneys be pald forthwlth to the Appllcant Trustee. 4. DECLARES that the Siqma motor vehicle registration
JNJ-79 was the property of the Bankrupt at the date
of Bankruptcy and that the applicant 1 s entltled to same as Trustee.
D: Settlement and entry of orders 1 s dealt with in
Rule 124 of the Bankruptcy Rules.
and Shelley Lu Jacka and a trustee company, Tangerine Pty Limlted. A number of Items of property must be dealt wlth in
these reasons and the evidence relating to each separately
analysed. However, some part of the history of the matter is relevant to all the transactions to be discussed. Considered (as
I regard them) as a group, those transactions began in October 1982, some three years before the bankruptcy.
The avoidmg provlsions relied on by the applicant
trustee are ss.120 and 121 of the Bankruptcy Act 1966. The former
has two time llmlts: that in subs.(l) is two years, and the latter, that in subs.(Z), is five years. Each of these provisions
- subs.(l) and subs.(2) - deals wlth settlements of property
before bankruptcy. So far as relevant to this case, the lmportant
differences between the two provlslons are that proof of "good
falth and . . . valuable conslderatlon" defeats an appllcatlon under
subs.(l) but not necessarily one under subs.(2). The trustee
succeeds under subs.12) unless It is shown against hlm (to put it slmply) that the settlor was solvent at the time of the settlement and that hls or her interest passed straight away.
In default of proof of an act of bankruptcy earller than
the date of presentation of the petition ( 2 4 October 1 9 8 5 ) , that
date is the date of the commencement of the bankruptcy for the purposes of these provlsions.
Section 121(1) has no time limit and allows attack on
dispositions with intent to defraud creditors.
The essential cause of the bankrupt's financial problems
was that durlng the last Gold Coast real estate boom she
contracted to buy high rise unlts off the plans, apparently hoping to sell them for a profit before settlement. The market fell;
there was no "on sale" of two of the units and as a result the bankrupt did not settle. Legal proceedings were brought against her by two of the vendors, one of whom obtained judgment for
damages in the Supreme Court on 9 February 1984.
It is important to note, however, that long before that
~udgment was obtained, the bankrupt had become apprehensive about the effect these transactlons In unlts were llkely to have upon
her flnanclal posltlon. On 27 September 1982, she wrote a letter
to a Mr. Towers, who was Involved In one of the purchases, saying: "However IF WE CAN GET O U T OF THE CONTRACT then that 1 s the way to go, as we cannot settle." The letter went on: "I wlll be eagerly awaltlng news from Peter Frost,
as 'rlght from the horses Cslc7 mouth' the blg boysare keeplng the deposlt and suing. Sorry the news is not better, but I dont Csic7 see how It CAN be
. . . its OUT as fast as posslble before Rbglstratlon
[sic3 etc. and get any property out of your name ASAP into a Deed of Trust or Coy. name . . . ' I
A month later, the bankrupt's solicitor, Mr. Wilson,
wrote her a letter acknowledging lnstructlons to constitute a trust and referring to the problem of future bankruptcy. Then on 25 November 1982, the bankrupt typed a letter to her solicitor saying: "I would like Palm Beach & Wyuna tucked away safely as possible from being touched by Developers." The bankrupt claimed she did not recall typing the
letter, but it was found in a bundle of documents taken from the bankrupt's premises in 1986.
The documents to which I have just referred suggest
that, long before the ~udgment of February 1984, the bankrupt had
it in mind to salt her property away. Far from dispelling the
impresslon created by those documents, evldence of later events reinforced it; I refer to the use of false names and the llke in
the carrying out of the transactlons discussed below.
The case made by the trustee was that the series of
transactions I have mentioned was entered into in antlcipatlon of
bankruptcy and to defeat the creditors ln bankruptcy.
The origin of the law presently embodied m s.121(1) 1 s
the statute 13 Eliz.c.5. In Barton v. The Deputy Commlssloner of Taxation of the Commonwealth of Australia (1974) 131 C.L.R. 370 at
p.374, Stephen J., in a ~udgment with whlch the other members of the Hlgh Court agreed, said:
'I... it is well establlshed that conveyances may fall wlthln that Statute, although there exlsted no creditors at the date of conveyance, so long as the intent to defeat future creditors be made out ..."
As I understand the operation of s.121, it is not enough for the
trustee to show merely that a dlsposition of property has been made with the idea, wholly or in part, of taking property out of
the reach of future creditors; there must be intent to defraud.
In the ensuing passages, there is discussion of the
dealings referred to in evidence under a number of headings; it is
not possible neatly to categorize them, as they interconnect at various points. 1. Palm Beach
The description of the property in question is lot 1 on
registered building units plan no. 4304. According to a letter
written by Mr Wilson to the Commissioner of Stamp Duties, the
bankrupt made a gift of the unit to her daughter, Mrs McMillan, who in turn sold the unit to Tangerme Pty Limited for the sum of $20.
Tangerme Pty Llmited, mentioned above as the second
respondent, was made the trustee of the Jacka trust on 28 October 1982. The bankrupt and Mrs McMlllan were the dlrectors, but the
latter llved In Victoria and the bankrupt In practice managed the
company. She claimed the trust was formed In order to provide for
her chlldren i n the event of her death. I flnd that not to be s o .
It was slmply a part of the mechanism designed to keep her property out of the reach of creditors; cf. Cranstoun v. Federal
Commissioner of Taxatlon E19843 2 A.T.C. 4,876 at 4,882. The Palm Beach property is the same as is mentioned in
the bankrupt's letter to Mr Wilson, partly quoted above. The
trustee's case was that the transactions with it were designed to see it "tucked away safely as possible", as set out in that letter. According to the form VG1, the "notification of change of ownership" required to be given to the Valuer-General, possession
of the property was given to Mrs McMillan as purchaser on 12
November 1982. That appears to be unllkely. The date of taking
possession under the further transaction from Mrs McMillan to Tangerine Pty Limlted was, according to the VG1, 15 November 1982.
The transfers lodged in the Real Property Office have correspondmg dates.
It is clear that these documents were predated. Mr
Wilson said, in effect, that he "would presume" from the notes on his file that hls instructlons were obtained on 22 November 1982 and, as I have polnted out, the letter which mentioned tucking Palm Beach away, found among the bankrupt's possessions, was dated
2 5 November.
The backdatlng, In my oplnlon, helps the applicant
trustee. If Mrs Jacka were, at the tlme, concerned about future bankruptcy, the backdatlng would have some polnt to it. If, as 1 s
her verslon of events, the trust had nothing to do wlth bankruptcy, the backdating 1 s mcornprehenslble.
The bankrupt sal6 In her evidence, speaking of the
property in question:
"I glfted it to Karen, and later on she put it into the trust . . ."
I do not believe that. The transfer to Karen (McMillan) and then
to the trust were two aspects of one transaction, and in a practical sense, were two phases of the tucking away spoken of in the letter of 25 November. The bankrupt, when asked if she knew
why Mrs McMillan put the property into the trust, said:
"She put it in because she was going back home, and she had a man friend down there, and he had a
business, and she thought that maybe she could come
up. She was having problems with him at that time.
She thought she could come up, and then she
realised it was terribly hot. It was Christmas
time, and she said, 'I really don't thmk I could
train horses up here."'
The dlfficulty of accepting this 1 s obvlous. Even the (predated) transfers have only three days between them.
In my oplnlon, the double transaction - the transfer to
Mrs McMlllan and then on to the trust - was an attempt to
compllcate the trall whlch would have to be followed in the event of bankruptcy.
The Palm Beach property was sold by Tangerine Pty
Llmited, under a contract whlch was settled on 8 January 1985, for
$55,000 and a sum of $52,541.13, part of the proceeds, was paid into the company's bank account.
I find that the dlspositlon of the property in question
to the trustee company, Tangerme Pty Limited, was such a
transaction as described in s.121(1) of the Act. The finding
involves treating the interposition of Mrs McMillan as a mere device and I so treat it; there was no independent decision by Mrs
McMillan to transfer the property to Tangerine Pty Limited. The
inference I draw is that both steps were taken at the direction of
the bankrupt. Further, I am of the view that there is no questionof applicatlon of s.121(2), preserving the interest of a "person
who has, in good faith and for valuable consideration" acqulred a
property. Whether these findings should be expressed as -
declarations is another question, discussed below.
From the bank account just mentioned, money went out
towards the purchase in 1985 of one of the other properties the
subject of this application, namely that sltuated at Burleigh
Waters, dlscussed In part 6 of these reasons. 2. Main Beach
About the same time as the Palm Beach property was
dlsposed of to Tangerlne Pty Llrnlted, the bankrupt sold a dwellmg house she owned at Maln Beach. The contract was dated 28 November
1982.
This property 1 s one of tnose mentioned in the letter 25 November quoted above; it 1s located at Wyuna Street.
of
There is no suggestion made by the applicant that the
purchaser took other than In good faith. What the applicant
wishes to do, however, is to follow the proceeds.
They were orlginally banked to an account the bankrupt had with Westpac at Broadbeach - on 21 December 1982.
On the
following day, $60,000 was taken from that account and a week
later $38,000 was withdrawn.
The bankrupt then opened two accounts in the name of
"Robson". One was with the National Australia Bank, Broadbeach and the other with the Commercial Banking Company Limited at Mermald Beach. She paid a total of $39,000 into the former and a total of $26,000 into the latter. Those moneys were all paid in between 23 December 1982 (the first payment, of $10,000, to the
Broadbeach account) and 6 January 1983 (the last payment, of
$8,000, to the same account). This was part of the flurry of activity on her part generated by the downturn in the Gold Coast
unit market.
During
the bankrupt clalmed that, unknown to her, a Mrs Curran had lent
money to her husband and herself during the 1 9 7 0 ' s and that the
payments to "Robson" were to Mrs Curran. Documents were producedthe course of lnvestigations of these matters,
in support of that story, but It was then abandoned. On 22 May
1986, in her public examlnatlon, the bankrupt gave evldence
agreemg that the documents she had produced were "entirely
false". It appears that they were fabrlcated as part of the
bankrupt's plans to get money away from creditors. In fact,
although the bankrupt, in evidence before m , seemed unwilling to
accept that she had admitted fabrication of these documents, it is clear that she did admit that and equally clear that they were
fabricated. I find that the name "Robson" was used to lessen the
risk that the money would be found. There was no such person known to the bankrupt, and her story about Mrs Curran was invented.
About the same time, the sum of $58.615 was deposited
wlth Trustees Executors and Agency Co. in the bankrupt's maiden
name, Joyce Dalton. The version given in relation to that was
that the bankrupt did not want one of her daughters to know of the account. I cannot accept that. In my opinion, the purpose of use of the maiden name was the same as that of use of the name
"Robson". Further discussion of the moneys lust dealt with - in the National Australia Bank, Broadbeach, in the Commercial Banklng
Company Limited, Mermald Beach, and on deposlt with the Trustees
Executors and Agency Co. - appears In part 4 . 3. Sunbird Court
Mr Wilson acted In a purported purchase by "Sherry Le
Robson" of a unit at Sunblrd Court In Burlelgh Waters. The property was, when sold, described as lot 3 on registered buildlng
units plan 5233. The contract was dated 1 7 December 1982 and the transaction was settled on 7 January 1983. A "special condltlon" typed on the back page of the contract made it "subject to and
conditional upon the purchaser obtalnlng final settlement on the
sale of her dwelling house at 5 Wyuna Street, Coral Gables on or before 21st December, 1982".
The presence of thls condition supports the inference
that the price of the property ($60,000) was to come wholly or in
part from the proceeds of sale of the property at Wyuna Street, Main Beach.
Of the $60,000, a total of $57,500 can be traced out of the accounts resulting from the Main Beach sale. On
6
January
1983, $35,000 was drawn from the National Australia Bank Account
and on 4 January 1983 $22,500 came from the Commerclal Banking Company account. Those sums were paid into Mr Wilson's trust account for the purchase of the Sunblrd Court property.
After that purchase, the bankrupt resided at Sunbird
Court for a whlle. She was ostensibly paying rent to one Robson who, of course, did not exlst. It was sald by the bankrupt that her daughter was at the mercy of certain crlmlnal elements who wanted to get hold of her assets, but there is in my oplnion no truth In the suggestion that her deallngs were caused by that
circumstance.
The unlt at Sunblrd Court was sold In November 1984 and
the proceeds went to Tangerine Pty Limlted, the trustee referred
to above. It is to be noted that the authorlty to place the money
in the account of Tangerine Pty Limited purported to be slgned by
one Robson.
4 . The Trustees Executors and Aqencv Co. Moneys and other Accounts
I have mentioned in part was deposited with Trustees Executors
2 that a sum totalling $58,615
and Agency Co. The deposits
were made between 27 October 1982 and 1 2 April 1983 and the bankrupt's maiden name "Joyce Dalton" was used. The bankrupt lodged a proof of debt with the liquidator of Trustees Executors
and Agency Co. and received from the liquidators the sum of
$42,875.94. That amount was banked to an account wlth a building society in the name "Freeman".
Various stories were told about the use of these false
names and during her public examination the bankrupt claimed she used the name "Freeman" "to keep things from my daughter and the men behind her, her associates". I do not believe that and am of
the opinlon that the false names were used to make it difficult
for creditors or their representatlves to chase assets. Later (in
December 1 9 8 5 ) three accounts wlth the same soclety (MetropolitanPermanent Building Society) were opened In the name of "Peta
Xelly". The next false name used was "Lena Brown" and a further account was opened ln that name
In March 1986 .
It 1 s not possible, as ~t seems to me, accurately to
ascertain the source of all payments into and fate of all payments
out of these accounts. The balance in the "Lena Brown" account 1s currently $14,258.31.
The bankrupt appears to maintain that moneys received
from the estate of her aunt, Mrs Curran, were intended to be held in trust. It appears that a cheque for $16,469.31 came from the Vlctorian Public Trustee in December 1985 on account of that estate, and that these moneys then flowed into the "Lena Brown" account.
The bankrupt claims that the estate moneys were intended
to be held by her In trust for her daughters. In support of that, a statutory declaratlon by one Colin Henry Fellow-Smith as been
produced. Mr Fellow-Smith says in the declaration that e was the manager of a hospital, of which I gather Mrs Curran was an inmate.
He says that Mrs Curran told him "Joy would be all right and that
her monies would go to nieces and newphews CsicJ and that Joy
would take charge of the money to be shared between Karen and
SHELLEY AS THEY NEEDED IT". Mr Fellow-Smith says, "She was writing a letter of intention in this regard, but apparently it became misplaced on her death at the hospltal".
A slmllar version of these events is glven by Mrs Jacka.
She says that her aunt "never left a wlll but she had a letter of intention and it has never been able to be found at the hospital". One circumstance whlch woula tend to make one doubt that
story was that Mrs Jacka admltted that the two daughters had never
been told that they had any Interest in the money.
Clalms that money left by a wlll or under an Intestacy
1 s subject to a secret trust arlse, ordinarily, In suits against
the alleged trustee. Here, that person herself claims a trust existed.
I accept that, even where there is no will, an
undertaking by a next of k m to apply property for a particular purpose may be enforced: Jacobs' Law of Trusts in Australia, 5th ed., para.719.
Clear represented an interest in an estate
proof
of
the
trust
or undertaking
is
necessary. Having studied the evidence relating to this point, I
do not feel satisfied of the truth of the bankrupt's case about
it. In my opinion, the money which came from the Public Trustee
held at the date of
bankruptcy.
5. Robina
On 23 November 1983, a block of land at Robina was
bought for $47, 800. A Mrs Pridham has glven evidence that the bankrupt bought the land wlthout telling Shelley Jacka, who is
supposed to have been a co-purchaser. The bankrupt denies Mrs
Pridham's verslon of these events. The land was bought in the
names of Shelley Lu Jacka and Tangerine Pty Limited as tenants in common In equal shares.
As to the mode of payment for the land, a number of
verslons exlsts.
Shelley Jacka sald on a two-week holiday on the Sunshine Coast and that the money was
that she got $50,000 from havinq gone
used to
buy exammation, agreed wlth that story.
the
Robina
land. The bankrupt,
in
her
public
Subsequently, the bankrupt said only $40,000 (or
thereabouts) of the prlce came from Shelley Jacka and the rest from Tangerine Pty Limited.
Then, at a later stage, the bankrupt talked about
$22,000 of the money having come by way of loan from people called
Armstrong. She said the repayments Shelley Jacka and that $40,000 was later paid by Shelley
of the loan were made by
Jacka to
reimburse the bankrupt.
At the risk of being excessively repetltive, I would
remark one could not place much reliance upon the bankrupt's version of these events.
There is a ledger card which shows that the bankrupt
paid two sums of $11,000 and $10,000 from the "Freeman" account to
Mr Wilson's trust account on 2 1 December 1983 and 22 December 1983
respectively. The dates correspond with the dates of cash
wlthdrawals from the "Freeman" account, winch were made In the
same amounts on the same dates. It seems clear that $22,000 came by way of loan from the Armstrongs. Repayments under the mortgage
have been attended to by the bankrupt; there 1 s a large degree of correspondence between deposits to that account and withdrawals
from the "Freeman" account.
Further, there is a document exhiblted to an affidavit
of Mr. Hosking (which document the bankrupt admits to having
wrltten) in whlch she said, in effect, that she bought the Robina land by putting in $25,000 and borrowing $22,000. The document
went on to say that its author (the bankrupt) paid the interest at
$283 per month. Despite the variance between the accounts given about the matter, there is no reason to doubt that, apart from the
deposit, the money necessary to purchase the land supplied by the
bankrupt, partly by means of the moneys extracted from the
"Freeman account" and partly by borrowings.
As to the deposit of $4,780, the matter is not quite so
clear. The bankrupt said at one stage that the sum was pald by Tangerine Pty Limlted and that her daughter Shelley relmbursed the amount later. Other documents support the notion that Shelley
Jacka contributed to the purchase. One could not be certaln what
the truth is, but on the whole I think I should find that the deposlt came from Shelley Jacka.
There 1 s a mortgage on the Roblna land, apparently
supporting a loan to Mrs McMillan. The mortgagee is not a party
to these proceedlngs and It would plainly be Improper to make any order against it. It therefore becomes unnecessary to conslder
the question - left rather obscure by the papers before me - whether, and to what extent, the securlty 1 s good against the trustee.
It appears to me then that the Roblna land belongs to
the trustee, subject to a charge In a sum of $4,780 In favour of Shelley Jacka and to such rlghts as the registered mortgagee has. 6. Burleiqh Waters
The money from the sale o f t ;he Sur lbird Cour t property
was used to buy a dwelling house at Burleigh Waters from a vendor
called Lenjo Pty Ltd. the contract having been made on 22 November 1984; the property was bought in the name Tangerine Pty Limited.
Other moneys came from the Trustees Executors and Agency Co.
account and the proceeds of sale of the Palm Beach property.
There was also an advance arranged by way of commercial bill by the National Australia Bank through Mr S. Ravenscroft, who dealt with the bankrupt concerning the loan. It appears that the land is sublect to registered mortgage number H528536 in favour of the
National Australia Bank. The trustee dld not assert that any
order should be made affecting the rights of the mortgagee, nor would it be possible to make such an order wlthout notice to it.
Apart from that it seems to me that no other person than
the bankrupt has any proprietary right of a beneflcial kind in
respect of the Burleigh Waters property. To put that more preclsely, I flnd that although the property was reglstered in the
name Tangerine Pty Limited, the cestui que trust was the bankrupt. l . Motor Vehlcle
There is a dispute concerning a Sigma motor vehicle,
reg. no. JNJ-79 which appears to have been asslgned to Mrs
McMillan for a nominal sum in 1983. The documents suggest that
the transfer was intended to be only temporary and the bankrupt kept the vehlcle in her possesslon.
It seems clear enough, in the circumstances, that the
trustee is entitled to disregard the transfer to Mrs McMillan. ORDERS SOUGHT
The trustee claimed orders in 18 paragraphs which it is
unnecessary to set out in full; the orders sought fall into groups.
Orders 1 - 3 : These relate to the 1982 dealings with
the Palm Beach property referred to In part 1 above. The trustee seeks declarations that the successive transfer are void against him under ss.120 and 121. I am satlsfied that the transfers were
made with intent to defraud creditors and that they were not disposltlons for valuable consideratlon in favour of persons who acted in good faith. It follows that the applicant 1 s entltled to treat them as vold.
However, it is lnappropriate to make declarations
accordingly, because the Palm Beach property was last sold under a contract settled In January 1985, and that transaction is not attacked; it was a sale to an outslder. Treating the two earlier
transfers as void would, therefore, avail the applicant not at all. However, the proceeds of the sale of that property, as have mentioned, went to the account of Tangerine Pty Limited and
I
were applied to the purchase of the Burleigh Waters property.
I find that those proceeds were beneficially owned by
the bankrupt at all material times. That is, I have decided that Tangerine Pty Limited was merely a facade; the true intention was
that moneys in that name would be beneficially owned by the bankrupt.
Orders 4 - 6: These orders relate to the purchase of the unit at Sunbird Court, in which moneys derlved from the sale of the Main Beach property were used, as explained in part 3 above. What the trustee seeks is a declaration that the transfer of the proceeds of sale to Tangerine Pty Limited is void against hlm. I find that that transfer was such a disposltion as is mentioned in s.121(1) of the Act. However, the moneys in question
have gone; they were used to buy the Burleigh Waters property
discussed in part 6 above. It therefore seems Inappropriate to
make a declaration which would be of hlstorical signlflcance only. I find that the money from the proceeds of sale of the Sunbird Court unlt were beneficially owned by the bankrupt; the
supposed trust was a sham.
I do not propose to make any of the orders sought In
para.4, 5 and 6 of the appllcatlon.
Orders 7 & 8: The appllcant seeks a declaratlon to the
effect that the proceeds of sale of the Palm Beach property, and
of the Sunbird Court property, were used by Tangerine Pty Limited to buy the Burleigh Waters property, and that Tangerme Pty
Limited holds that property in trust for the applicant. I have already found that the cestui que trust under the Tangerine Pty Limited trust was the bankrupt, when the property was registered
in the name Tangerine Pty Limited. It follows that that
beneficial interest vested on 24 October 1985, if not earlier, in the applicant.
It appears to me that the proper course is to make a
declaration that the land described as lot 411 on reglstered plan number 151590 county of Ward, parish of Gilston, certificate of
title volume 5595 folio 247 is beneficially owned by the applicant trustee, the land being subject to a registered mortgage number H528536. There will also be an order vesting the said property in the appllcant trustee subject to the said mortgage.
Orders 9, 10, 11 & 12: These relate to the Roblna
property. The trustee seeks a declaration that the appllcatlon f
moneys towards the purchase of the property constltuted such a dlspositlon as is mentloned in s . 1 2 0 or 5.121, and a declaratlon that the land 1 s held in trust for the applicant.
I have found that the deposlt of $4,780 came from
Shelley Lu Jacka; the rest of the money which went towards the purchase was beneficmlly owned by the bankrupt.
It 1 s not lmmedlately obvlous what would be the result
of declaring the applicatlon of the moneys towards the purchase to
be void against the applicant. Presumably, the purpose of doing
so would be to enable the trustee to disregard Shelley Lu Jacka's
being registered as one of the property's legal owners, but it
does not appear to me that the declarations sought would achieve
that result. There is a more fundamental objection: the
application of moneys sought to be treated as vold was effected by
* . ' " . m . 21.
paying the moneys to the vendor. There is no question of recovery
of those moneys; they have been, and will remain, paid.
I therefore decline to make the declarations sought respect to the appllcation of the moneys.
with
I am satisfied, as I
have mentioned, that at the date of the bankruptcy the beneficial
owner of the land was the bankrupt. Subject to a charge for the sum of $4,780 in favour of Shelley Lu Jacka and the rights of the mortgagee, by vlrtue of the bankruptcy, that beneflcial Interest
vested in the applicant and there will be a declaration that the land 1s the property of the applicant subject to the interests I
have mentioned - the charge and the mortgage - and an order vestlng it in the appllcant.
Order 13: Next, the applicant seeks a declaratlon that
the moneys in the "Lena Brown" account with the Metropolitan Permanent Bullding Soclety constitute moneys divislble among the
credltors pursuant to s.116.
The substantlal dispute about the "Lena Brown" moneys
has been dealt with above; it related to the sums whlch came from the Curran estate. I propose to make a declaratlon that the
moneys standing to the credlt of an account in the name of "Lena Brown" wlth the Metropolltan Permanent Building Society constltute property divisible among the creditors of the bankrupt pursuant to
s.116 of the Bankruptcy Act 1966, and to order that all such moneys be paid to the applicant.
Orders 14 - 16: These relate to the Siqma motor
vehicle, registration JNJ-79, registered in the name of the first
respondent. In accordance with the reasons, there will be a
declaration that the said vehicle was the property of the bankrupt
at the date of the bankruptcy and that the applicant is entitled
to the same as trustee. To enable the party to make submissions as to the form
of the proposed declarations and orders, and on the question
whether any other declarations and orders should flow from the
findings I have made, the matter will be listed for further
mentlon. It does not seem to me appropriate to make any order for costs other than one agalnst the bankrupt herself, but I shall, if deslred, hear the parties on that question also.
t certify that this and :he d. / preceding ~ x ~ e s are a tn.3 CC?;/ c: the reasons for
~uclgment herein of HIS Honcur Mr. Justlce Plncus /(rG'%.-V
- 4 Associate
Dated f 0 t4mzh 1938
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