Thomas v Tyler (No.2)

[2005] FMCA 342

FEDERAL MAGISTRATES COURT OF AUSTRALIA

THOMAS v TYLER (No.2) [2005] FMCA 342

BANKRUPTCY – Application under ss.120, 121 – whether sale of property by bankrupt to his nephew was a sale at an under value – whether report of court appointed valuer should be accepted – whether there should be a reconveyance of land – forms of orders.

Bankruptcy Act 1966 (Cth), ss.120, 121
Federal Magistrates Court Rules 2001

Land Valuation and Compensation in Australia; R O Rost and H G
Land Acquisition, Douglas Brown 4^th Ed
The Law of Resumption and Compensation in Australia, Marcus S Jacobs
The Law Affecting Valuation of Land in Australia, Alan A Hyam

Sellers v One Step Plumbing and Concrete Pty Ltd [2002] FCA 478
Victorian Producers’ Co-Op Co Ltd v Kenneth [1999] FCA 1488
Sutherland v Brien [1999] NSWSC 155
Spencer v Commonwealth (1907) 5 CLR 418
James v Swan Hill Sewerage Authority [1978] VR 519
Schmierer v Horan & Anor [2004] FMCA 16

Applicant: GAVIN THOMAS

Respondent: MICHAEL TYLER

File Number: SYG1291 OF 2004

Judgment of: Raphael FM

Hearing dates: 10, 14, 15 March 2005

Date of Last Submission: 15 March 2005

Delivered at: Sydney

Delivered on: 29 March 2005

REPRESENTATION

Counsel for the Applicant: Mr P McEwen SC and Mr B Skinner

Solicitors for the Applicant: Argyle Partnership

Counsel for the Respondent: Mr R Marshall

Solicitors for the Respondent: Purcell Insolvency Lawyers

ORDERS

1. The applicant, on or before 5 April 2005, bring in draft minutes of order.

2. The respondent pay the applicant’s costs including the costs of the court appointed valuer for the valuation and for his attendance at court to be taxed if not agreed in accordance with the Federal Court Act and Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG1291 of 2004

GAVIN THOMAS

Applicant

And

MICHAEL TYLER

Respondent

REASONS FOR JUDGMENT

Introduction

1. These proceedings are an application filed by the Trustee of the bankrupt estate of Douglas Keith Tyler seeking a declaration from the court pursuant to s.120 or s.121 of the Bankruptcy Act 1966 (Cth) (the “Act”) that a transfer of land described in Folio Identifiers 83/752847, 49/752847, 1/409844, 48/752847, 29/752847, 32/752847 and Perpetual Leasehold 79/752847, 1961/63 Folio Identifier 94/726640 by the bankrupt to the respondent Michael Tyler on or about 10 November 2000 was void against Gavin Thomas as trustee for the bankrupt Douglas Tyler. Mr Tyler became bankrupt on the making of a sequestration order by the Federal Court on 14 February 2003. His bankruptcy commenced on 27 May 2002, a date within two years of the transfer.

2. The respondent defended the claim arguing that he had purchased the property following negotiations with the Commonwealth Bank which was mortgagee in possession of the farms constituting the property owned by his uncle. He maintained that the purchase price which he paid for the property, $635,000.00 was the market value of the property at the time of sale. Section 120 of the Act is in the following form:

   Undervalued transactions

   Transfers that are…