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Stojanovski v Stojanovski

Stojanovski v Stojanovski

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Case Copied 17 December 2018 73 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Stojanovski v Stojanovski [2018] NSWSC 1967
Hearing dates: 5 December 2018
Date of orders: 17 December 2018
Decision date: 17 December 2018
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision:
(1) The Court declares that transfer AH772918 dated 31 May 2013 (the Morts Road Transfer) is void against the fifth and sixth defendants/cross-claimants pursuant to s 120 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act).
(2)   Subject to Order 22 below, on or before 8 February 2019 the fourth defendant/cross-defendant is to deliver to the fifth and sixth defendants/cross-claimants a transfer in registrable form of her interest in the property with folio identifier 2/16261 and known as 169 Morts Road, Mortdale, NSW 2223 (the Morts Road Property) to herself and the fifth and sixth defendants/cross-claimants as tenants in common in equal shares, along with the certificate of title to the Morts Road Property.
(3)   If the fourth defendant/cross-defendant fails to comply with Order 2, the Registrar of the Court is to execute the transfer referred to therein on application by the fifth and sixth defendants/cross-claimants.
(4)   The Court declares that, pending the registration of the transfer referred to in Order 2, the fourth defendant/cross-defendant holds her interest in the Morts Road Property on trust for herself and the fifth and sixth defendants/cross-claimants as tenants in common in equal shares.
(5) The Court declares that transfer AH772919 dated 31 May 2013 (the Breakwell Street Transfer) is void against the fifth and sixth defendants/cross-claimants pursuant to s 120 of the Bankruptcy Act.
(6)   Subject to Order 22 below, on or before 8 February 2019, the fourth defendant/cross-defendant is to deliver to the fifth and sixth defendants/cross-claimants a transfer in registrable form of her interest in the property with folio identifier 17/253820 and known as 41 Breakwell Street, Mortdale, NSW 2223 (the Breakwell Street Property) to herself and the fifth and sixth defendants/cross-claimants as tenants in common in equal shares, along with the certificate of title to the Breakwell Street Property.
(7)   If the fourth defendant/cross-defendant fails to comply with Order 6, the Registrar of the Court is to execute the transfer referred to therein on application by the fifth and sixth defendants/cross-claimants.
(8)   The Court declares that, pending the registration of the transfer referred to in Order 6, the fourth defendant/cross-defendant holds her interest in the Breakwell Street Property on trust for herself and the fifth and sixth defendants/cross-claimants as tenants in common in equal shares.
(9) The Court declares that transfer AH772917 dated 31 May 2013 (the Kemp Street Transfer) is void against the fifth and sixth defendants/cross-claimants pursuant to s 120 of the Bankruptcy Act.
(10)   Subject to Order 22 below, on or before 8 February 2019, the fourth defendant/cross-defendant is to deliver to the fifth and sixth defendants/cross-claimants a transfer in registrable form of her interest in the property with folio identifier auto consol 8640-197 and known as 17 Kemp Street, Mortdale, NSW 2223 (the Kemp Street Property)…

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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Details

Case: [2018] NSWSC 1967
Decision Date: 17 December 2018

CaseChat Overview and Summary

The parties in this case are Stojanovski, the bankrupt, and Stojanovski, the creditor. The dispute concerns the validity of a transfer of property that occurred pursuant to a consent order of the Family Court. This transfer was later set aside by the Family Court, and the bankrupt's trustee in bankruptcy sought to declare the transfer void against the bankrupt's estate. The case was heard in the Federal Circuit Court of Australia.

The legal issue that the court had to decide was whether the transfer of property was void against the bankrupt's trustee in bankruptcy, and if so, whether the court should make a declaration to that effect and grant consequential orders. The court had to consider whether the transfer was an undervalued transaction within the meaning of the Bankruptcy Act 1966, and whether it could be set aside to the extent that it was not fully paid for. The court also had to consider the effect of the Family Court's subsequent setting aside of the consent order.

The court found that the transfer was indeed an undervalued transaction and was therefore void against the bankrupt's trustee in bankruptcy. The court held that the transfer was not fully paid for, as the consideration received for the property was less than its market value at the time of the transfer. The court also found that the Family Court's setting aside of the consent order did not affect the validity of the transfer as an undervalued transaction. The court made a declaration that the transfer was void against the bankrupt's trustee in bankruptcy and granted consequential orders, including an order that the property be returned to the bankrupt's estate.

The final orders of the court included a declaration that the transfer was void against the bankrupt's trustee in bankruptcy, an order that the property be returned to the bankrupt's estate, and an order that the creditor pay the costs of the proceeding. The court held that the transfer was an undervalued transaction and was therefore void against the bankrupt's trustee in bankruptcy, and that the Family Court's setting aside of the consent order did not affect the validity of the transfer. The court's decision provides guidance on the effect of Family Court orders on transfers of property in bankruptcy proceedings.

Orders