Sheahan v Cooper
[1999] FCA 766
•4 JUNE 1999
FEDERAL COURT OF AUSTRALIA
Sheahan v Cooper [1999] FCA 766
BANKRUPTCY – agreement to transfer share of property – whether agreement created a trust in the equitable interest in the property – transfer occurred later – whether transfer a sham under s 120 – whether interest transferred at all – whether consideration existed for the transfer – whether transfer for market value.
BANKRUPTCY – whether bankrupt was, or was about to become insolvent at the time of transfer of land.
TRUSTS – whether constructive trust could be created where trustee in bankruptcy asserted title.
TRUSTS – apportionment of interests under Baumgartner principle.
Bankruptcy Act 1966 (Cth) ss 116, 120 and 121
Bankruptcy Legislation Amendment Act 1996 Sch 1 Pt 2 Item 457Baumgartner v Baumgartner (1987) 164 CLR 137 applied
Sharrment Pty Ltd v Official Receiver in Bankruptcy (1988) 18 FCR 449 considered
Donnelly (Trustee of Estate of Edelsten) v Edelsten (1994) 49 FCR 384 considered
Ex parte Holthausen; Re Scheibler (1874) LR 9 Ch App 722 considered
Re Bastable; Ex parte Trustee [1901] 2 KB 518 considered
Re Sharpe [1980] 1 All ER 198 considered
Muschinski v Dodds (1985) 160 CLR 583 applied
Osborn; Ex parte Trustee of the Property of Osborn (A Bankrupt) v Osborn (1990) 25 FCR 547 distinguished
Calverley v Green (1985) 155 CLR 242 considered
Ashton v Prentice (Federal Court, Hill J, unreported, 23 October 1998) consideredJOHN SHEAHAN as Trustee of the Bankrupt Estate of RICHARD JOHN COOPER v NOELENE MICHELLE COOPER
S 7017 OF 1999
MANSFIELD J
ADELAIDE
8 JUNE 1999
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
S 7017 OF 1999
IN THE MATTER OF THE BANKRUPT ESTATE OF
RICHARD JOHN COOPER
BETWEEN:
JOHN SHEAHAN
as Trustee of the Bankrupt Estate of
RICHARD JOHN COOPER
ApplicantAND:
NOELENE MICHELLE COOPER
RespondentJUDGE:
MANSFIELD J
DATE OF ORDER:
4 JUNE 1999
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.The application is dismissed.
2.Pursuant to O 52 r 14 the time from which the period runs for the institution of an appeal be fixed at 8 June 1999.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
S 7017 OF 1999
IN THE MATTER OF THE BANKRUPT ESTATE OF
RICHARD JOHN COOPER
BETWEEN:
JOHN SHEAHAN
as Trustee of the Bankrupt Estate of
RICHARD JOHN COOPER
ApplicantAND:
NOELENE MICHELLE COOPER
Respondent
JUDGE:
MANSFIELD J
DATE:
8 JUNE 1999
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The claim
The applicant John Sheahan (“Mr Sheahan”) was appointed trustee of the bankrupt estate of Richard John Cooper (“Mr Cooper”) on 20 April 1998.
Mr Sheahan promptly identified the land in Certificate of Title Register Book Volume 4257 Folio 921 (“the property”) apparently as being owned by Mr Cooper and by the respondent Noelene Michelle Cooper (“Ms Cooper”). The land was acquired by Mr Cooper and Ms Cooper on 26 February 1986, shortly before they were married in August 1986. Where it is convenient, I shall refer to Ms Cooper and Mr Cooper together as “the Coopers”.
It became apparent to Mr Sheahan that Ms Cooper claimed that Mr Cooper’s interest in the land had been transferred to her by instrument dated 11 June 1995 (“the transfer”), and that Mr Cooper had no interest in the land. Ms Cooper also claimed that the transfer was executed pursuant to an agreement made in April 1993 when Ms Cooper substantially reduced the amount owing under a mortgage over the property. The transfer has not been registered.
Mr Sheahan brings this action for orders
1)declaring that, notwithstanding the transfer apparently dated 11 July 1995, or the earlier agreement alleged, Mr Cooper’s one half interest in the land was not transferred, alternatively
2)declaring that the transfer is void by reason of s 120 of the Bankruptcy Act 1966 (Cth) (“the Act”), and in the further alternative
3)declaring that the transfer is void by reason of s 121 of the Act.
He seeks to have Mr Cooper’s apparent interest in the land available to the creditor in his bankrupt estate. The only creditor in his estate is Commonwealth Bank of Australia (“the Bank”).
The provisions of ss 120 and 121 of the Act as substituted by the Bankruptcy Legislation Amendment Act 1996 apply to the determination of those claims, even though the transactions to which they relate occurred before the commencement of that Act: Sch 1 Pt 2 Item 457 of that Act.
The witnesses
As is common in circumstances such as the present, Mr Sheahan’s evidence was largely documentary, although he gave evidence to confirm certain formal matters which were within his knowledge. It included extensive banking records from the Bank from which the Coopers had obtained a housing loan soon after they acquired the property, secured by a mortgage over the property. That mortgage was discharged at about the time of the transfer. One topic upon which counsel for Ms Cooper sought to cross-examine Mr Sheahan was to establish that Mr Sheahan, as trustee of the bankrupt estate of Mr Cooper, was acting at the direction or behest of the Bank, and that the Bank had singled out Mr Cooper and other members of his family for special and vigorous attention because of their involvement in a rural action group. Those matters, if they are correct, may have relevance to some other form of proceedings, but I ruled that the topic was not relevant to the present proceedings. I do not think that those matters, even if established, could affect the outcome of the present application. It involves only the three claims identified above. Their resolution depends upon the determination of the facts concerning the asserted agreement of April 1993 and the transfer, and the motives for those two transactions. The reasons for the Bank vigorously pressing Mr Sheahan to pursue this action (if it has) could not throw any relevant light on those questions.
Evidence was given by Ms Cooper, by her husband Mr Cooper, and by her mother Beverley Joan Warmington (“Ms Warmington”). I found each of those witnesses to be honest and frank. They each gave their evidence in a forthcoming and open way, acknowledging readily matters of which they were unaware or matters upon which they were possibly mistaken. By way of illustration, there were sections of Mr Cooper’s affidavit as evidence-in-chief which clearly were drawn by his adviser. There were expressions he did not know or did not use. He acknowledged those matters. He was not a sophisticated person. When tested on those matters, he was able in a spontaneous way to explain the facts referred to, consistent with the affidavit even though he did not really understand its full import or some of its terms. The witnesses’ demeanour was impressive. I did not discern any element of reconstruction, of prevarication, or of attempting to dress up unfavourable facts. I accept the evidence from each of them as honest and reliable. My findings reflect my acceptance of their evidence. There are a few areas where it is, however, necessary to weigh that evidence against other material to determine a fact or facts in issue arising under ss 120 or 121 of the Act. Where it is necessary, I will discuss in some detail the evidence before making my findings on those issues. In many respects, the evidence is clear.
The evidence also included an affidavit of Peter David Kerin (“Mr Kerin”), a law clerk employed by Ms Cooper’s solicitors, concerning the circumstances in which he placed a date on the transfer, and an affidavit of Hilda Saunders (“Ms Saunders”), the Justice of the Peace before whom the transfer was executed by the Coopers. Mr Kerin was not required for cross-examination. Ms Saunders’ affidavit was presented as an exhibit to an affidavit of Mr Sheahan but counsel accepted that it carried weight as her affidavit. She did not attend to give oral evidence, and there was some evidence that she was unfit to travel from Kadina to do so. I propose to give weight to her affidavit in those circumstances.
Finally, evidence was also called from Tennyson Turner (“Mr Turner”), a consultant who has been in a general way an adviser to the Coopers for many years. His evidence also concerned the preparation and execution of the transfer, and the discharge of the mortgage over the property granted to the Bank. His credit was challenged in cross-examination and in submissions. In all significant respects, his evidence is consistent with evidence given by Mr Cooper or by Ms Cooper. There is no instance where Mr Turner’s evidence stands alone on an important issue. In those circumstances, I do not regard it as necessary to deal in detail with the criticisms proffered of his evidence. I accept Mr Turner’s evidence generally to the extent that it confirms the evidence given by one or other of the Coopers. I do not need to consider whether to place weight on it beyond those topics.
Events to April 1993
The property was purchased on 26 February 1986. The total payable at settlement (including the deposit) was $24,212. I accept the evidence of the Coopers that Ms Cooper contributed $18,000 towards the purchase price and Mr Cooper contributed $6,000.
Shortly after, the Coopers applied to the Bank for, and were granted, a housing loan of $48,000 to assist in building a house on the land (“the housing loan”). The contract price for the house was $51,650. The housing loan was secured by a first registered mortgage over the land. The house was duly built, and the Coopers and their children have since lived there. They have two children, now aged nine and five. The balance of the cost of the house, namely $3,650, was contributed by Ms Cooper with monies lent to her by her parents. Ms Warmington’s evidence on that topic was not challenged.
The Coopers maintained a separate loan account at the Bank for the housing loan. Monies were regularly transferred into that account from a joint account in their names also maintained with the Bank. The available documents show that that account operated from at least August 1990, and I find on the basis of Ms Cooper’s evidence that it operated from about 1987, that is soon after they were married. Before that joint account was established, I accept Ms Cooper’s evidence, that the regular payments were transferred from an account solely in the name of Mr Cooper. In respect of each of the joint account, and the earlier account in the name of Mr Cooper alone, I accept the Coopers’ evidence that the accounts were managed by Ms Cooper, that she deposited all her earnings into those accounts and that, if there was a possible shortfall in the funds in either of those accounts, she procured the make-up funds needed from Mr Cooper’s earnings.
Until about June 1989, the recurrent repayments were barely sufficient to meet the interest incurred on the housing loan. The Coopers then increased the repayment rate and thereafter they slowly reduced the outstanding capital as well as meeting the interest payments. By early April 1993, the amount still owing on the mortgage loan was about $35,000. The Coopers had paid the Bank by that time about $54,000 for interest and in reduction of the housing loan.
I accept Ms Cooper’s evidence, which was confirmed by Mr Cooper, that most of that amount was paid by her by the direct application of her wages and that it was periodically topped up by her from Mr Cooper’s income. At the same time, the income of Mr Cooper was applied principally towards the family’s day to day needs. Ms Cooper acknowledged that that was simply the way they chose to arrange the family finances. Mr Cooper worked on the farm known as Rothmore Farm (“the farm”) and was paid a regular wage or drawings from its activities. Ms Cooper was working full time over that period initially as a pharmacy assistant and later as a medical receptionist. In addition, she worked on weekends and at nights as a waitress. Her earnings per year varied, but she told me and I accept that in 1994 they were in the order of $12,000 to $13,000. No doubt they were somewhat less than that in earlier years, but having regard to the amounts paid to the Bank by regular payments I find her earnings were generally sufficient to meet those payments. She also helped Mr Cooper with the work he was required to do on the farm by general bookkeeping and paying of bills, sundry tasks, and some physical work. She was not paid for that work. I do not consider that Ms Cooper was entitled to recover from Mr Cooper any amount in respect of her work helping out on the farm. The farm was operated by Rothmore Farms Pty Ltd to 10 February 1993, and thereafter by Belgravia Pty Ltd, as trustee for the Jill Cooper Family Trust. Any work done, even at Mr Cooper’s request, would have led to an entitlement against one or other of those two entities. Counsel for Ms Cooper expressed that as being work done “for him”. I do not find it necessary to decide if those circumstances created any equitable right in personam available to Ms Cooper against Mr Cooper.
The amount of Mr Cooper’s income from the farm is not clear. The evidence shows that the Bank was pressuring the operator of the farm to reduce its operating indebtedness. I refer in more detail later in these reasons, to the Bank’s dealings with Rothmore Farms Pty Ltd at that time. No doubt that put pressure on Mr Cooper to earn or draw less for his personal use. He said that he worked very long hours, but received only about half what Ms Cooper was able to earn from time to time. I accept that as a rough indication of their relative earnings. In reaching that conclusion, I have had regard to the fact that for certain periods Ms Cooper was not earning income as she stopped employment for a time after the birth of each of her children. It may be that there should nevertheless be allowance made for those periods in the assessment of the respective contributions to the family income pool: per Gaudron J in Baumgartner v Baumgartner (1987) 164 CLR 137 at 157.
I consider that it is appropriate to treat the pooled earnings of the Coopers as being applied to their personal and family living expenses, and then to the Bank to pay interest and capital repayments on the housing loan, even though as a matter of arrangement between them, Ms Cooper’s earnings went to the payments to the Bank. I find that their available resources did not extend much beyond that point. Consequently, the relative contributions of Ms Cooper and Mr Cooper to the housing loan by April 1993 were about two thirds from Ms Cooper and one third from Mr Cooper. In addition Ms Cooper had paid $18,000 towards the purchase of the property, and $3,650 towards the building contract. Mr Cooper had paid $6,000 towards the purchase of the property.
April 1993
On 15 April 1993, $10,000 was paid in reduction of the housing loan.
The payment of $10,000 came from monies given to Ms Cooper by her parents. Her parents gave her the money following the death of her grandmother in 1992. Ms Warmington inherited her mother’s home at Moonta. That property was then transferred to Darren Warmington, Ms Warmington’s son, for $10,000 less than its perceived market value. The gift of $10,000 was made to Ms Cooper so that her two children were treated equally.
The gift was made to Ms Cooper subject to two express conditions, namely that the $10,000 be applied towards reduction of the housing loan, and that Mr Cooper’s interest in the property be transferred to Ms Cooper. Ms Warmington and her husband were aware of the fact, as I find to be the case, that Ms Cooper had contributed most of the money towards purchase of the land and the construction of the house. At that time, I accept that Ms Warmington and her husband had no knowledge of any financial problems Mr Cooper was experiencing with the Bank. I accept that those conditions were imposed in a desire to ensure that their daughter “always had a roof over her head”, and without any particular concern about Mr Cooper’s financial position. Those conditions were expressly conveyed to Ms Cooper. Ms Cooper then conveyed those conditions of the proposed gift from her parents to Mr Cooper. I find that he accepted those conditions. He accepted at the time that Ms Cooper had contributed much more than he had toward the purchase of the property, to building the house, and on the housing loan repayments. In the event that the $10,000 was applied to partial repayment of the housing loan, he also obtained the benefit that the housing loan, for which he was jointly liable to the Bank, would be substantially reduced.
The second of those conditions was not immediately implemented. I accept that that was simply because the Coopers did not get around to it. I do not consider that their failure then to transfer the property to Ms Cooper indicates that the condition (about which Ms Warmington was not challenged) that the property be transferred to Ms Cooper was deliberately not implemented because it was not accepted by Mr Cooper or by the Coopers. I have referred below to Mr Cooper’s relationship with the Bank for reasons unassociated with the housing loan. I find that the agreement made in April 1993 was not prompted by, or influenced by, that relationship in any way.
The Transfer
The rate of recurrent payments in respect of the housing loan was maintained after April 1993. By mid July 1995 there was $8,590 outstanding.
In about mid June 1995, Ms Cooper was informed that she was about to receive $7,520 as a beneficiary of her late grandfather’s estate. The estate then was apparently in the process of being wound up. On 20 June 1995, she received that payment. Ms Cooper’s evidence about this payment provides another example of the ingenuousness and frank evidence of the Coopers. When first asked where that payment came from, she was unable to remember. After a break in her evidence, she said that she had been reminded by her father of the source of that money. The contemporaneous documents provided by her clearly confirm that to have been the case. My impression of the Coopers, confirmed by that evidence, also throws light upon the criticisms levied against their evidence by Mr Sheahan that their evidence should be rejected because they did not refer to significant events at as early a stage as they could have. In the context of the impression they made upon me, those criticisms are consistent with them simply attempting to convey the truth in the course of their evidence.
I accept her evidence that that inheritance payment was applied by her towards the final payment of the housing loan and so as to discharge the mortgage to the Bank. It was, I find, shortly after notice that that payment was forthcoming that she caused inquiries to be made, through Mr Turner, with a view to the mortgage being paid out. In her evidence, initially, she said it was the imminent final payment of the housing loan which prompted attention to the fact that the conveyance agreed upon in April 1993 had not been formally effected, and led to the transfer. In the light of the evidence of the availability of funds almost sufficient to pay off the housing loan, that explanation becomes much more convincing. That illustration of her ingenuousness adds to the reasons why I accept the Cooper’s evidence even though, as Mr Sheahan points out, the significance of the agreement and the transfer emerged only about the time he first brought proceedings to recover Mr Cooper’s apparent interest in the property.
There were a number of reasons put forward by Mr Sheahan to support the contention that the transfer was not executed on 11 July 1995. Partly, they are based on the transfer itself. On its face, it bears the date 11 July 1995. That date was put on the transfer in mid October 1998 by Mr Kerin when he was asked to arrange for the transfer to be stamped. He did so after observing the dates in the appearance clause on the back of the document and after checking with Ms Cooper. He understood the document had to be dated on its face. It was duly stamped on 15 October 1998. Neither of the Cooper’s could confidently recall whether the document had been dated when it was executed. The appearance clause has two dates: 11 July 1995 (written in black ink), and 11 July 1998 (written in blue ink). The evidence does not disclose who inserted the date 11 July 1995 written in black ink, but I find it was on the transfer by the time solicitors for Ms Cooper received it for stamping. Nor does the evidence clearly disclose who wrote on the transfer the date 11 July 1998, although it appears to be in the same pen as the signature of Hilda Saunders (“Ms Saunders”) before whom the transfer was executed by both the Coopers.
Despite those considerations, and the other matters referred to by Mr Sheahan, I am satisfied that the transfer was executed by the Coopers before Ms Saunders on 11 July 1995. I accept their evidence to that effect. I also find that the circumstance which prompted that document was the availability to Ms Cooper of her share of her grandfather’s estate. Mr Turner, in my view, prepared the transfer and a discharge of the mortgage, and sent them to the Coopers for execution. I find that they returned the duly executed transfer to Mr Turner shortly after 11 July 1995, and I accept his evidence that he has held the transfer since then. Mr Turner, on behalf of Ms Cooper, also dealt with the Bank to procure the discharge of the mortgage. Once the mortgage was discharged, Mr Turner received and has since held the certificate of title to the property.
I also consider that those findings are consistent with a letter of 26 June 1995 to the Bank indicating that Ms Cooper was then interested in purchasing the Bank’s mortgage, and that she held a second mortgage over Mr Cooper’s interest in the property. That letter was, I find, prepared and signed by Mr Turner although sent under the letterhead of Australian Business Support Group. It provides another illustration of the straightforwardness of Ms Cooper as a witness. In her evidence, she frankly acknowledged that there was no such second mortgage. She could not understand how that reference appeared. I suspect it reflects an incomplete understanding by Mr Turner of the earlier agreement made in April 1993. He was not cross-examined on the contents of that letter.
I also find that the transfer occurred because the Coopers wanted to implement the condition then unperformed, but agreed to in April 1993, that Mr Cooper transfer his interest in the property to Ms Cooper. The Coopers were advised by Mr Turner as to how to go about the transfer. I find further that they were told of a need to put a value on the property for stamp duty purposes. They sought an appraisal from the local real estate agent. They were told, and accepted, that it was worth about $80,000. The transfer of one half of that property was therefore said to be in consideration of the sum of $40,000. They each said that they agreed that no amount was necessary to be paid because, in effect, Mr Cooper owed Ms Cooper a substantial sum because of the disparity in payments made by each of them and because he had not paid Ms Cooper for any of the work she had done for him over the years in relation to the farm.
The discharge of the mortgage, and the final payment of the housing loan of $8,590, occurred at about the same time as the transfer. I find that the $8,590 then paid to discharge the mortgage was from a joint operating account of the Coopers with National Australia Bank, but specifically from funds deposited into that account for that purpose on 20 June 1995 and 12 July 1995 of $7,520 and $1,000 respectively. Each of those deposits was specifically to discharge the mortgage. Each was solely Ms Cooper’s money only. The $7,520 was from her grandfather’s estate. The $1,000 was a loan made to her by Mr Turner to make up the necessary funds.
The payments made to the Bank for interest and in repayment of capital to the time of the discharge were about $93,352, including the two payments of $10,000 and $8,590 to which I have referred.
Counsel for Mr Sheahan pointed out that the transfer was executed some days before the mortgage was discharged. Again, I regard that timing difference as consistent with the fact that the transfer was to fulfil the agreement made in April 1993. The Coopers, perhaps naively, appreciated that the transfer would occur at about the same time as Ms Cooper paid off the balance of the housing loan and did not take any steps to ensure the two transactions occurred contemporaneously. It was not of especial significance to them which event occurred first. They left such matters to Mr Turner.
The respective contributions of the Coopers in respect of the property to the time when the housing loan was repaid were, I find, as follows:
Mr Cooper
Ms Cooper
Purchase
6,000
18,000
House building
3,650
Lump sum payment
10,000
Discharge of mortgage
8,590
Total
6,000
40,240
In addition they had together paid about $74,762 to the Bank (I have excluded the two payments of $10,000 and $8,590), of which about $30,000 was towards the reduction of the capital and the balance towards interest. On the basis of my finding that Ms Cooper contributed about two thirds of the funds to the household pool of funds, and Mr Cooper contributed about one third of that pool, their respective contributions to that sum of about $75,000 were $50,000 by Ms Cooper and $25,000 by Mr Cooper.
In her affidavit, Ms Cooper says that the amount paid by her for the purchase of the land and to the Bank was about $50,000 and that Mr Cooper’s contribution was about $19,000. She said during her oral evidence that she thought her contribution was a lot more than that, and that those figures had been calculated by others. I find that to have been the case. The total paid for the property, for the house (in excess of the borrowed sum), and to the Bank for repayment of capital and interest was almost $121,000. On the basis of my findings above, I find that Ms Cooper contributed about $90,000 towards those payments, and Mr Cooper about $31,000. It is not possible to be precise.
Mr Cooper’s dealings with the Bank
Mr Cooper was at material times indebted, or potentially indebted, to the Bank for a very substantial sum independently of the housing loan.
On 1 September 1986, he and others had guaranteed to the Bank the advances and accommodation provided by the Bank to Rothmore Farms Pty Ltd (“Rothmore Farms”) to operate the farm.
On 10 February 1993, the Bank cancelled (at least temporarily) Rothmore Farms’ overdraft facility because Rothmore Farms was contesting the validity or applicability of an equitable mortgage over certain crops, so that the Australian Wheat Board could not pay to the Bank certain proceeds of sale of those crops. On 9 March 1993, the Bank informed Rothmore Farms that a bill for $435,000 had matured, and would not be rolled over. It sought immediate repayment of that sum, plus “unwinding costs” of $40,261. By notice of demand of 30 March 1993, the Bank demanded from Rothmore Farms repayment of $693,761. It also gave notice to Mr Cooper of its demand against him under the guarantee for that amount. On 4 May 1993, the Bank wrote to Rothmore Farms indicating that it was prepared to discuss the loan arrangement, in an endeavour to resolve the existing impasse, and Mr Cooper replied for Rothmore Farms on 18 May 1993, inviting a proposal from the Bank.
The evidence does not disclose the full detail of communications over the next eighteen months or so. On 14 November 1994, the solicitor for the Bank wrote to Mr Cooper to indicate instructions had been received to bring proceedings against him under the guarantee. There was further correspondence. On 7 February 1995, that solicitor again wrote to Mr Cooper notifying him of the intention to bring proceedings against him. On 12 February 1995, the Bank commenced proceedings against him and his brother Simon Vincent Cooper based upon that guarantee. The claim was for $1,047,070. The evidence of communications with the Bank does not go beyond 30 November 1995.
Mr Cooper’s oral evidence did not dispute what those documents reveal. However, he said that as a result of his ongoing discussion with the solicitor for the Bank from about March 1993, he expected to be able to settle the dispute between the Bank and Rothmore Farms. He regarded the real issue as being how much should be paid to do so. He specifically denied that he executed the transfer to delay or defeat any creditors or his bankruptcy, or to avoid the consequences of his bankruptcy. He said that it did not cross his mind that the Bank would “go this far”, that is (as I understood him) to go so far as to enforce the guarantee, to have him declared bankrupt, and to seek to set aside the transfer. I accept that evidence.
Ms Cooper also was aware of the demand made on Rothmore Farms by the Bank, and of the proceedings against Mr Cooper commenced in February 1995. She denied that the agreement made in April 1993, and the transfer executed on 11 July 1995, were made by her in any way to put Mr Cooper’s assets out of the reach of the Bank or to assist in delaying the Bank in getting access to Mr Cooper’s interest in the property. I accept her evidence.
Consideration of claims
The findings of fact I have made are sufficient to reject Mr Sheahan’s first contention that the transfer was a sham: cp Sharrment Pty Ltd v Official Receiver in Bankruptcy (1988) 18 FCR 449; Donnelly (Trustee of Estate of Edelsten) v Edelsten (1994) 49 FCR 384. I find that the transfer was executed on 11 July 1995 to give effect to the agreement made in April 1993 when Ms Cooper’s parents lent her $10,000 on the conditions that it be applied towards reducing the housing loan, and that the property be transferred to Ms Cooper. As noted, I find that Mr Cooper expressly acknowledged, and accepted, those conditions at that time with Ms Cooper. As the payment of that sum to reduce the housing loan occurred on 15 April 1993, I find that his agreement took place on or before that date.
In my judgment, from that time, the interest of Mr Cooper in the property was held by him in trust for Ms Cooper. She was, in my view, entitled to call upon him to transfer the legal title to his interest in the property on and after that date. He had agreed to transfer his interest in that property to her from that date, for good consideration. Mr Cooper’s intention was clear, the subject matter of that intention was clear, and the object of that intention was clear. There was no contemplation on his part, or on Ms Cooper’s part, of that agreement in some way putting the property out of reach of Mr Cooper’s creditors. The Coopers by then had together paid the Bank some $54,000 in interest and repayments, and reflecting my findings above, Ms Cooper had paid some $36,000 or two thirds of that amount and Mr Cooper had paid some $18,000 of that amount. Again allowing for their respective contributions to the purchase of the land totalling about $24,000, and for the balance of the building contract of $3,650, she had contributed by that stage some $57,650 to Mr Cooper’s $24,000. The amount then outstanding on the housing loan, secured by the mortgage, was about $35,000. It was about to be reduced by the payment of the $10,000.
The property of Mr Cooper available in his bankruptcy does not include property held by him in trust for Ms Cooper: s 116(1) and (2)(a) of the Act. Accordingly, I find that, subject to the consideration of ss 120 and 121 of the Act, the equitable interest in the property which Mr Cooper previously held was thereafter not part of the property of Mr Cooper available to his creditor in his bankruptcy. Ms Cooper is entitled to have Mr Sheahan transfer title in the property to her: see eg Ex parte Holthausen; Re Scheibler (1874) LR 9 Ch App 722; Re Bastable; Ex parte Trustee [1901] 2 KB 518; Re Sharpe [1980] 1 All ER 198.
I do not consider that the terms of the transfer, in particular the reference to the consideration being $40,000, or the evidence as to the reasons why there was no money actually paid to meet that consideration, affect that conclusion. At the time of the transfer, I find that there was some discussion between the Coopers on those topics. I do not think that they then fully addressed the effect of the agreement made in April 1993. They did understand the need for a value to be placed on the land for stamp duty purposes, and they knew that in reality the transfer was to occur without Ms Cooper paying any amount to Mr Cooper because of the earlier agreement. Their attempts to neutralise the nominated value of the consideration by offsetting claims of Ms Cooper against Mr Cooper are to be seen in that context. I accept that they were genuinely identified claims, and that they believed that the offsets equated to a sum greater than $40,000. For reasons which appear below, I find in any event that a proper factual foundation for those claims existed, even though Ms Cooper was not entitled to recover from Mr Cooper any amount for her work in relation to the farm. At that time, Mr Turner was involved in advising them. I do not know the details of that advice, but I find that it was directed towards implementing the consequence of the April 1993 agreement, without fully understanding the terms and legal effect of that agreement as I have found it to be. I accept that Mr Turner was not involved in the events leading up to, or the making of, that agreement. His lack of involvement in, but general awareness of, that agreement is I find also the explanation for the reference to a second mortgage in his letter to the Bank of 26 June 1995.
Sections 120 of the Act relevantly provides:
“120(1)A transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee) is void against the trustee in the transferor’s bankruptcy if:
(a)the transfer took place in the period beginning 5 years before the commencement of the bankruptcy and ending on the date of the bankruptcy; and
(b)the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property.
…
(3)Despite subsection (1), a transfer is not void against the trustee if:
(a)the transfer took place more than 2 years before the commencement of the bankruptcy; and
(b)the transferee proves that, at the time of the transfer, the transferor was insolvent.
The transfer took place on 11 July 1995. The only interest in the property which Mr Cooper then had was the bare legal title. In my judgment, the execution of the transfer did no more than constitute a step in the process of transferring that bare legal interest. Mr Sheahan could be called upon to transfer that bare legal interest. The equitable estate in the property had already vested in Ms Cooper by 15 April 1993. Even though the transfer of the bare legal title took place within five years of the commencement of Mr Cooper’s bankruptcy, in my view the transfer does not fall under s 120. The transfer of the equitable estate in the property had occurred outside the period to which s 120 applied. Mr Sheahan accepted that the commencement of the bankruptcy is 20 April 1998, so the agreement was made and the trust in respect of Mr Cooper’s equitable interest in the property created just outside the period of five years before that date.
If s 120 applied to the transfer of property effected by the agreement (see s 120(7)), and that transfer of property occurred within five years of the commencement of the bankruptcy of Mr Cooper, I do not consider that it would be void against Mr Sheahan under that section. I would find that Ms Cooper gave consideration of not less than the market value of the property so that the conjunctive condition of its operation in s 120(1)(b) would not be satisfied.
I have found above that, by the time of the agreement, Ms Cooper had contributed towards the property about $57,650 and Mr Cooper about $24,000. There was little evidence about the value of the property. The inquiries made by the Coopers in mid 1995 are referred to above. Neither of the Coopers were cross-examined about those inquiries that the market value of the property was then of the order of $80,000. I accept that evidence. I do not think the property was worth much less in mid 1993. The cost of the property, and of the house, in 1986 had together been $75,650. The amount outstanding at the time of the agreement in April 1993 was about $35,000, so the value of the equity in the property was about $45,000 and the value of Mr Cooper’s apparent one half interest about $22,500. In addition to the difference in their respective contributions, he was by the agreement to receive the benefit of the indebtedness to the Bank being reduced by a further $10,000.
There was no evidence of any express agreement between the Coopers in 1986 as to how their different contributions to the purchase of the property, to the house, or to the payments to the Bank in respect of the housing loan should be treated. However, in the light of Baumgartner (above) and Muschinski v Dodds (1985) 160 CLR 583, I consider that at the least, their different contributions gave rise to an equitable entitlement on the part of Ms Cooper as against Mr Cooper to the extent of that disparity in relation to his interest in the property. In my judgment, the discharge of that entitlement in equity by the agreement, and the benefit to Mr Cooper of the further reduction in the housing loan, did constitute consideration at least of the market value of Mr Cooper’s then interest in the property. Compared to the value of his apparent half interest, she had contributed towards the property by then about $33,650 more than he had and she was about to pay a further sum of $10,000 to reduce their joint indebtedness under the housing loan.
Counsel for Mr Sheahan contended that no allowance should be made for the different contributions of the Coopers to the purchase price or the house cost or the payments to the bank. It was argued that that difference was made up of “past consideration” which Ms Cooper was not entitled to bring to account for the purposes of the agreement, so there was no consideration for the agreement. Reliance was placed upon the decision of Pincus J in Re Osborn; Ex parte Trustee of the Property of Osborn (A Bankrupt) v Osborn (1990) 25 FCR 547. I do not accept that contention. Although there was no evidence of an express agreement in 1986 between the Coopers that any disparity in those payments would constitute a debt payable by Mr Cooper to Ms Cooper, I accept their evidence that they were very much aware of that disparity at the time of the agreement and at the time of the transfer, and that they regarded that disparity as giving rise to an obligation on the part of Mr Cooper to make up to Ms Cooper that disparity. I infer from their evidence that, as between themselves, they regarded that disparity as creating a debt owed by Mr Cooper to Mrs Cooper. The release of that debt, as it existed at the time of the agreement, constituted part of the consideration for the agreement.
Osborn (above) did not involve any question of an express trust. The bankrupt had transferred the property in question to himself and his wife as joint tenants within two years of his bankruptcy. The consideration was the financial, emotional and nursing support she had given him over some twenty years. Pincus J at 553, after referring to Muschinski (above) and Baumgartner (above), identified the critical question as being
“… whether such an intention [to create a trust] should be ascribed to the parties, on the ground of unconscionable conduct of the bankrupt.”
His Honour then pointed out that the law should lean in favour of results which conduce to certainty in bankruptcy administration, and that there was no authority in which a constructive trust based on imputed intention was held good against a trustee in bankruptcy. He found that the constructive trust did not exist at the time of the transfer, because to that time the bankrupt was not acting unconscionably because he was prepared to recognise his wife’s claim nor was he acting unconscionably after that time because he had recognised his wife’s claim by the transfer. Nor was the trustee acting unconscionably in attempting to recover property which, on the face of it, was recoverable. His Honour also found as a fact that the consideration for the transfer was not good consideration in law (addressing s 120(1) as it previously stood).
I do not think that that case is of assistance to Mr Sheahan. I have found there to have been an express trust by reason of the agreement. I have also found that there was, at least in personam, an entitlement of Ms Cooper against Mr Cooper to the extent referred to above (see the remarks of Deane J in Muschinski at 614) which was discharged by the agreement, and further consideration by the agreement to reduce the joint indebtedness under the housing loan by $10,000. In any event, having regard to the terms of the agreement, it would have been unconscionable of Mr Cooper after the agreement to assert an entitlement to the property, having regard to its terms. He did not act unconscionably by doing so. In fact, as the transfer later shows, he recognised Ms Cooper’s claim. It would be a curious result if the transfer were to be avoided against Mr Cooper, and Mr Sheahan as Mr Cooper’s trustee were able then to proceed as if there were no such agreement. As his trustee, Mr Sheahan would then be acting in his stead in a way which I would regard as unconscionable.
It may also be that, even absent evidence at the time of the agreement that Mr Cooper intended to act unconscionably by not recognising the disparity in the respective contributions of the Coopers towards the property, Mr Cooper’s interest in the property was held in trust for Ms Cooper to the extent of that disparity. I consider that, upon the purchase of the property, their respective equitable interests then reflected their respective contributions to the purchase price: Calverley v Green (1985) 155 CLR 242; Muschinski at 598-599, 613-614, 624; Baumgartner at 145-146, 157. There is nothing which indicates that that equitable presumption should not apply. The fact that Ms Cooper only paid the balance of the housing contract not covered by the housing loan, and the disparity in the Coopers’ respective contributions to the family pool of funds, tend to point in support of that equitable presumption. However, that matter was not argued by counsel on behalf of Ms Cooper, and I do not finally decide that question.
Counsel for Ms Cooper also contended that the transfer of property effected by the agreement was not void because Ms Cooper has proved that, at the time of the agreement, Mr Cooper was solvent.
The evidence as to Mr Cooper’s solvency is sparse. I find that he had no debts of any significance other than to the Bank, and no assets of any significance other than his interest in the property and whatever interest he held in the farm. I use that expression “the farm” because it is not clear on the evidence in this case precisely how Mr Cooper claims to have an interest in the farm. He was working on the farm, and being paid for that work. His liability to the Bank is first in respect of the housing loan. There is nothing to indicate any difficulty in meeting the repayments on the housing loan from time to time. The picture, but for the other potential source of liability to the Bank, is a conventional and uncomplicated one, and one which would indicate an ability to pay his debts as and when they became payable. The only complication to that picture is the second basis of his liability to the Bank, namely under the guarantee.
On 30 March 1993, the Bank had made a demand of Mr Cooper under his guarantee of 1 September 1996 for $693,761. I am unable to make any findings on the evidence in this matter as to the assets and liabilities of Rothmore Farm, or as to its cash flow, other than to observe that the Bank was clearly pressuring Rothmore Farms to direct more of its cash flow to reduction of its debt. I am unable to make any findings about the value of the Bank’s securities against others, or over the property of Rothmore Farms, or as to their realisability. I am unable to make any findings about Mr Cooper’s ability to procure Rothmore Farms or any other persons to relieve the pressure from the Bank by making a payment in reduction of its indebtedness. Consequently, in my view, the demand upon Mr Cooper under the guarantee is not shown to be one which was one which he could accommodate in any meaningful way, even by arranging a payment to the Bank which would delay its desire to press that claim against him. I am therefore not persuaded that Mr Cooper was in a position to meet that liability as and when it fell due. I reject that response put forward for Ms Cooper.
If the agreement of April 1993 did not have the effect which I have found, then s 120 would apply to the transfer. The transfer was executed within five years before the commencement of Mr Cooper’s bankruptcy.
In that event, I would find that Ms Cooper gave consideration of not less value than the market value of the property at that time. Mr Sheahan would therefore fail to prove the fact to which s 120(1)(b) refers.
I have found above that the value of the property at the time of the transfer was of the order of $80,000. The market value of Mr Cooper’s interest in the property was not greater than $40,000 at the time of the transfer, even if his interest was not charged with any equitable interest. I suspect that that was not an amount which, on the open market, was likely to be realised having regard to the property then being held as a joint tenancy in a matrimonial home. However, there is no evidence about what that lesser value may be, and for this purpose I proceed on the basis that his interest was worth $40,000.
I have found that the respective contributions of Ms Cooper and Mr Cooper to payments for, or in respect of, the property and the housing loan were accepted by them at the least as giving rise to an obligation by Mr Cooper to Ms Cooper to the extent of the disparity. As at the date of that transfer, therefore, there was a debt in Ms Cooper’s favour of an amount of about the same as the value of Mr Cooper’s interest in the property. My findings above are that their respective contributions, including to the final repayment, were about $120,000 from Ms Cooper and $31,000 from Mr Cooper. By the transfer, that debt was or would have been discharged. In my judgment, consideration was not less than the market value of Mr Cooper’s interest in the property. Accordingly, even on the assumption outlined above, I do not consider that the transfer is void against Mr Sheahan by reason of s 120 of the Act.
In view of my finding about the limited interest which Mr Cooper held in the property after the agreement of April 1993, s 121 also has no practical application. From that date, Mr Cooper had only a bare legal interest in the property. The transfer was merely a step in the process of transferring that bare legal interest to Ms Cooper. Effectively, there was no interest he held in the property available for distribution to his creditor, and no property of his estate to which its access was hindered or delayed.
However, it is desirable to address the issues arising under s 121 on the basis for which Mr Sheahan contended, namely that Mr Cooper at the time of the transfer had a half interest in the property. In that event, I have found the value of that interest to be not more than $40,000.
Section 121 of the Act relevantly provides:
“121(1)A transfer of property by a person who later becomes a bankrupt (the “transferor”) to another person (the “transferee” is void against the trustee in the transferor’s bankruptcy if:
(a)the property would probably have become part of the transferor’s estate or would probably have been available to creditors if the property had not been transferred; and
(b)the transferor’s main purpose in making the transfer was:
(i)to prevent the transferred property from becoming divisible among the transferor’s creditors; or
(ii)to hinder or delay the process of making property available for division among the transferor’s creditors.
(2)The transferor’s main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent
…
(4)Despite subsection (1), a transfer of property is not void against the trustee if:
(a)the consideration that the transferee gave for the transfer was at least as valuable as the market value of the property; and
(b)the transferee did not know that the transferor’s main purpose in making the transfer was the purpose described in paragraph (1)(b); and
(c)the transferee could not reasonably have inferred that, at the time of the transfer, the transferor was, or was about to become, insolvent.”
I have found earlier in these reasons the main purpose of Mr Cooper in entering into the agreement in April 1993 and in executing the transfer on 11 July 1995. It was not that to which s 121(1)(b) of the Act refers. Consequently, subject to consideration of s 121(2) of the Act, Mr Sheahan’s attack based upon s 121(1) of the Act must also fail.
I have earlier found that, apart from Mr Cooper’s guarantee of 1 September 1986 to the Bank and matters relating to it, his financial position was modest and unremarkable. It would not indicate insolvency either at the time of the agreement or at the time of the transfer. It is clear that the Bank was pressuring Rothmore Farms in early 1993, and had made demands upon Mr Cooper and Rothmore Farms by 30 March 1993. There is, as I have already noted, insufficient evidence to make findings about Rothmore Farms’ assets and liabilities, or the resources available to Mr Cooper to make some satisfactory accommodation with the bank. His evidence was that at all times he was confident that, on behalf of Rothmore Farms he could negotiate a satisfactory lump sum repayment, so that it would no longer pursue Rothmore Farms or the guarantors including himself for any further amounts. He described only briefly those negotiations with the Bank’s solicitor. I accept that he was having such discussions, and that they were generally to the effect he described. The Bank did not proceed upon its notices of 30 March 1993 within the next several months. I accept that, as a result of the discussions, it was not then pressing him for payment under the guarantee and that there was a sound prospect that some accommodation would be reached that did not involve any payment from Mr Cooper under the guarantee. The agreement was entered into in early April 1993 for reasons entirely unrelated to Rothmore Farms’ debt to the Bank, or Mr Cooper’s guarantee of that debt.
In my judgment, for those reasons, it has not been shown that at the time of the agreement Mr Cooper was, or was about to become, insolvent. This is a matter in which neither Mr Sheahan nor Ms Cooper have discharged the onus which s 121(2) and 120(3)(b) respectively impose on the topic of Mr Cooper’s solvency.
The position had changed somewhat by the time of the transfer, if (contrary to my conclusions) the transfer did constitute a conveyance of his interest in property by Mr Cooper that otherwise would have been available to the Bank as the creditor in his bankrupt estate. Proceedings on the guarantee were threatened from late 1994, and were instituted against Mr Cooper in February 1995. What had happened in the period from 30 March 1993 to 14 November 1994 when the Bank’s solicitor wrote to inform Mr Cooper of the intention to sue him on the guarantee, so as to prompt that letter, is not clear. It is Mr Cooper’s evidence that, notwithstanding the proceedings, the discussions with the Bank’s solicitor continued up to and after the time of the transfer, and that the tenor of those discussions continued to provide him with a foundation for expecting the Bank’s claim would be resolved. Indeed, his evidence was that during 1995 that prospect of resolution improved. I accept that evidence. It is unclear whether that was because the amount Rothmore Farms was offering to pay had increased, or for some other reason. However, I do not think it has been proved that the Bank then was, in a real sense, pressing for the payment by Mr Cooper of the indebtedness of Rothmore Farms under the guarantee. In my view, on the material before me, the Bank and Mr Cooper were progressing towards a resolution of the Bank’s claim on the basis of a lump sum repayment being made by Rothmore Farms. Accordingly, at the time of the transfer also, in my judgment it has not been proved that Mr Cooper was, or was about to become, insolvent. If the relevant transaction is the transfer, I consider that nevertheless it is not void against Mr Sheahan under s 121(1) of the Act.
In addition, whether the transfer of property was effected by the agreement or by the transfer, in my judgment the transfer of property is not void against Mr Sheahan by the operation of s 121(4) of the Act. I have made findings that the value of consideration given for the transfer, under either of those events, was at least as valuable as the market value of Mr Cooper’s interest in the property. I have also specifically found earlier in these reasons what Ms Cooper knew about Mr Cooper’s purpose in respect of the agreement, and the transfer. I find that she did not know that Mr Cooper’s main purpose was that referred to in s 121(1)(b). As a fact, I have found that that was not his purpose in April 1993 or in July 1995. Even if, contrary to my finding as to his actual purpose, I were obliged by s 121(2) to take his main purpose to have been that described in s 121(1)(b), I find that Ms Cooper did not know that that was his main purpose. I also find that, at either April 1993 or at July 1995, Ms Cooper could not reasonably have inferred that Mr Cooper was, or was about to become, insolvent. She gave only brief evidence touching on that topic. She was aware that Mr Cooper had no assets other than whatever interest he may have had in the farming property or business, and in the property. She was aware of the change of trustees of the Jill Cooper Family Trust from Rothmore Farms to Belgravia Pty Ltd, that is the change of operators of the farm, so as to keep the farm operating in the face of the Bank’s claims. She was aware of the proceedings by the Bank against Mr Cooper after they were commenced in February 1995 and that they related to a primary liability of Rothmore Farms to the Bank. I infer that she was in general terms aware of Mr Cooper’s discussions with the solicitor for the Bank as they progressed. I accept her evidence that there was no element of the agreement or of the transfer which was related to any intention to put Mr Cooper’s assets beyond the reach of the Bank. The fact that she had no such consideration in mind indicates, in my view, that she also had no belief that Mr Cooper was, or was about to become, insolvent at either time. I note that s 121(4)(b) and (c) refer to “the transferee”, that is Ms Cooper. Attention is directed to her particular state of mind, and to what she could reasonably have inferred. My observations of her indicate that she was straightforward and direct. If she, in her own mind, had any reason to suspect or infer that Ms Cooper was or was about to become insolvent, I am confident she would have said so. She did not answer any questions with an eye to the provisions of the Act. She also impressed me as inexperienced and uncomplicated in her approach to matters of business. Information which in the mind of another might reasonably have led to an inference being drawn about Mr Cooper’s state of solvency would not necessarily have done so in her mind. If the onus is upon Mr Sheahan to prove the matter to which s 121(4)(c) refers (cp Ashton v Prentice, Federal Court, Hill J, unreported, 23 October 1998), then I would find that he has not discharged that onus. I am however positively persuaded that Ms Cooper at the time of the agreement could not reasonably have inferred that Mr Cooper was then, or was about to become, insolvent.
The information available to her at the time of the agreement was that Rothmore Farms had significant cash flow problems because the Bank wanted reduction of its indebtedness, and that the Bank was pressuring Rothmore Farms and Mr Cooper to address that issue. She is not shown to have been aware of Mr Cooper’s guarantee at that time. Without that knowledge, clearly there was no reason to think that the Bank’s claims against Rothmore Farms could impact upon Mr Cooper’s solvency. Even if she were aware then of the guarantee, and of the Bank’s letter to Mr Cooper of 30 March 1993, the overall picture at that early point, so far as she was aware of it, was such that she could not reasonably have inferred that Mr Cooper was, or was about to become insolvent. There was little evidence directed to that question, but on what there is, I find that she did not have information from which she could reasonably have inferred that in a practical way the Bank’s then claims did, or would in the near future, be extended against Mr Cooper personally as distinct from Rothmore Farms. I am unable to find precisely the detailed nature of the information she had been given by Mr Cooper of his dealings with the Bank, but I find that such information as she had been given was to the effect that the dispute with the Bank would be sorted out, and in particular I find that Mr Cooper gave her no information which might have suggested that in reality the Bank might pursue its claims against him personally. By the time of the transfer, Ms Cooper was aware of the guarantee and of the Bank’s proceedings against Mr Cooper. I find she had also received information from Mr Cooper about his ongoing discussions with the solicitor for the Bank, although the evidence does not disclose precisely what information she had been given. I find that that information was generally to the effect that, notwithstanding the guarantee and the proceedings, Mr Cooper’s discussions with the solicitor for the Bank were progressing and that he expected the dispute with the Bank to be resolved. I further find that there was nothing in that information which reasonably she could have taken as suggesting that at a practical level the Bank would, or would need to, proceed with any claim against Mr Cooper personally. It has been necessary to make those findings on slight evidence, but I have drawn those conclusions from my findings about Mr Cooper’s discussions with the Bank as they progressed, and from my firm views about the honesty of each of the Coopers on their state of mind as well as my perception of Ms Cooper’s level of commercial awareness. In making those findings, I have not applied the test of “good faith” relevant under the preceding incarnation of ss 120 and 121. I have used my acceptance of evidence of the Coopers, which under those provisions as previously expressed would have protected the agreement and the transfer from attack, to assist in making findings of fact relevant to the issues to which those sections now direct attention.
In my view, the information Ms Cooper had available to her was such that she could not reasonably have inferred that, at the time of the agreement or at the time of the transfer, Mr Cooper was, or was about to become, insolvent.
Accordingly, in my judgment s 121 does not operate in the circumstances to render either the agreement or the transfer void against Mr Sheahan.
In my judgment, the application should be dismissed.
I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate:
Dated: 8 June 1999
Counsel for the Applicant: Mr I Robertson Solicitors for the Applicant: Piper Alderman Counsel for the Respondent: Mr D Fitzgibbon Solicitors for the Respondent: Alderman Consultant Solicitors Dates of Hearing: 27 May and 3 June 1999 Date of Order: 4 June 1999 Date of Reasons: 8 June 1999
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