Simon and Simon and Ors

This case involved an application by a wife (the applicant) against her husband (the first respondent) and another party (the second respondent) concerning property adjustment and the setting aside of certain transactions. The dispute centred on a loan agreement and mortgage executed between the husband and the second respondent, which the wife alleged were intended to defeat her claim in family law proceedings. The matter also involved the trustee in bankruptcy of the husband (the fifth respondent), who sought to have the same transactions declared void against him under the *Bankruptcy Act 1966*.

The court was required to determine several legal issues. Firstly, in the context of family law property adjustment, the court had to assess the contributions of the parties, including a loan and a gift from the husband's father, and consider the intention of the donor of the gift. Secondly, the court had to decide whether the loan agreement and mortgage constituted a disposition of property intended to defeat the wife's claim, and if so, whether these instruments should be set aside under the *Family Law Act 1975*. Thirdly, the court had to consider whether the loan agreement and mortgage were void as against the trustee in bankruptcy, particularly given they were executed within five years of the husband's bankruptcy and whether the second respondent provided valuable consideration.

In its reasoning, the court found that the contributions of the parties were equal. Crucially, the court determined that the loan agreement and mortgage were a sham transaction designed to defeat the wife's claim and were therefore void against the trustee in bankruptcy under section 120(1) of the *Bankruptcy Act 1966*. Consequently, the court ordered that the loan agreement and mortgage be set aside under section 106B of the *Family Law Act 1975*. The court further ordered the sale of a property, with the proceeds to be applied with 65% to the applicant and 35% to the fifth respondent. The court also made orders appointing the Registry Manager to execute documents if any party failed to comply with the orders.