Re Lambie

The High Court of Australia considered an appeal concerning the interpretation of section 100 of the *Bankruptcy Act 1966* (Cth) in *Re Lambie*. The case involved a bankrupt, Mr Lambie, and the trustee of his bankrupt estate, who sought to recover certain assets. The dispute centred on whether the trustee could claim a property that had been transferred to Mr Lambie's wife prior to his bankruptcy.

The primary legal issue before the High Court was whether the transfer of the property to Mrs Lambie was a disposition of property that could be avoided by the trustee under section 100 of the *Bankruptcy Act*. This section allows a trustee to avoid certain transactions entered into by a bankrupt before their bankruptcy if those transactions were entered into for the purpose of delaying or defeating creditors. The court had to determine the scope and application of this provision, particularly in relation to transfers made to a spouse.

The High Court held that section 100 of the *Bankruptcy Act* requires proof of a specific purpose to delay or defeat creditors. The mere fact that a transaction might have the effect of placing property beyond the reach of creditors is not sufficient to attract the operation of the section. The court emphasised that the purpose must be the dominant or primary purpose of the bankrupt at the time of the disposition. In this instance, the court found that the evidence did not establish that Mr Lambie's dominant purpose in transferring the property to his wife was to delay or defeat his creditors.

Consequently, the High Court allowed the appeal, finding that the trustee had not established the necessary conditions for avoiding the transfer under section 100 of the *Bankruptcy Act*. The property in question was therefore not part of Mr Lambie's bankrupt estate.