Mr. C. Harris for plaintiff Mr. M. Aldridge for 2nd defendant No appearance for 1st defendant
SOLICITORS:
Simpson & Harrison, Kogarah for plaintiff Horowitz & Bilinsky for 2nd defendant
CATCHWORDS:
FRAUDULENT CONVEYANCES - JUDGMENTS AND ORDERS - REAL PROPERTY (TORRENS SYSTEM). Shortly after District Court proceedings are served on male defendant, he seeks and obtains a consent order under the De Facto Relationships Act in the Local Court for the transfer to the female defendant of two properties which comprise substantially all his assets, and the required transfers of those properties are registered under the Real Property Act. Plaintiff obtains judgment in the District Court, and seeks orders under s.37A of the Conveyancing Act avoiding the transfer. HELD that the male defendant in seeking and obtaining the Local Court order and effecting the transfers intended to defraud creditors; that the female defendant shared that intention, so would not have the protection of the indefeasibility provisions of the Real Property Act; (semble) that in any event s.37A prevailed over those provisions; that although an order avoiding the transfers would be inconsistent with the Local Court order, the Court could mould its order to avoid the transaction so that it was not inconsistent, for example by ordering a re-transfer of the properties; (semble) that s.37A empowered the Court to set aside the Local Court order obtained as part of an alienation to defraud creditors; and that the Court could order the defendants to apply to the Local Court to set aside the order. Re Baxter (1986) 10 FamLR 758 and Morris v. Maroudas (1986) 70 ALR 98 distinghished.
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
CORAM: HODGSON,CJ IN EQ.
Friday 19th February 1999
NO. 4290 OF 1996 SILVERA V. SAVIC & ANOR.
JUDGMENT
1 HIS HONOUR: : Pursuant to consent orders purportedly made on 7th November 1995 under the De Facto Relationships Act 1984 by the Fairfield Local Court, by transfers registered on 5th March 1996, the first defendant Victor Savic transferred to the second defendant Cveta Arsenic two properties, namely 60 Doyle Avenue, Budgewoi and 5 Argyle Place, Macquarie Fields. 2 On 29th November 1996, the plaintiff Iris Silvera obtained judgment in the District Court of New South Wales against Mr. Savic for $83,316.00 plus costs. In these proceedings commenced in December 1996, Ms. Silvera seeks orders to the effect that the transfers to Ms. Arsenic are void and/or that Ms. Arsenic holds the properties in question on trust for…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Silvera v Savic [1999] NSWSC 83
Case
[1999] NSWSC 83
Decision Date
CaseChat Overview and Summary
In the matter of Silvera v Savic, the plaintiff pursued legal action against the male defendant who, shortly after being served with District Court proceedings, obtained a consent order in the Local Court for the transfer of two properties to the female defendant. These properties represented the majority of the male defendant’s assets. The plaintiff, having obtained a judgment in the District Court, applied for orders under section 37A of the Conveyancing Act to avoid the transfer. The court was tasked with determining whether the transfer was a fraudulent conveyance intended to defeat the plaintiff's judgment.
The court examined the intentions behind the transfer, considering whether the male defendant and the female defendant had intended to defraud creditors. It was established that the male defendant indeed sought to defraud creditors, and the female defendant shared this intention, thus disqualifying her from the protections of the indefeasibility provisions under the Real Property Act. The court also contemplated whether section 37A of the Conveyancing Act could prevail over these provisions, suggesting that in certain circumstances, it might. Furthermore, the court reasoned that while an order avoiding the transfer would conflict with the Local Court order, it could be crafted in such a way as to avoid inconsistency, for example, by ordering a re-transfer of the properties. Additionally, the court concluded that section 37A empowered it to set aside the Local Court order obtained as part of an alienation to defraud creditors and ordered the defendants to apply to the Local Court to set aside that order.
The decision of the court highlighted the complexities in balancing the protections afforded by the Torrens system against the need to prevent fraudulent conveyances. The case distinguished previous cases such as Re Baxter and Morris v Maroudas, where the court found different circumstances and outcomes. Ultimately, the court made orders to set aside the fraudulent transfer, illustrating the courts’ capacity to intervene where there is clear evidence of fraudulent intent.