Walton v The Official Receiver - [2022] FedCFamC2G 1075

Federal Circuit and Family Court of Australia
(DIVISION 2)
Walton v The Official Receiver [2022] FedCFamC2G 1075

File number(s): BRG 417 of 2021

Judgment of: JUDGE EGAN

Date of judgment: 23 December 2022

Catchwords: BANKRUPTCY – application to set aside notice issued pursuant to s 139ZQ of Bankruptcy Act – Cross Application for declaration that transfer of money prior to bankruptcy was void as against trustee of bankrupt estate – where applicant failed to satisfy Court that payment was not a voidable transfer – application to set aside notice dismissed – declaratory orders made.

Legislation: Bankruptcy Act 1966 (Cth) ss. 139ZQ, 139ZS and 121

Cases cited: Lym International Pty Ltd v Marcolongo [2011] NSWCA 303
BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367

Division: Division 2 General Federal Law

Number of paragraphs: 32

Date of last submission/s: 12 December 2022

Date of hearing: 11 July 2022 and 12 December 2022

Place: Brisbane

Counsel for the Applicant: Ms S Philippou

Solicitor for the Applicant: Celtic Legal

Counsel for the Respondents: Mr C Curtis

Solicitor for the Respondents: Holman Webb
ORDERS

BRG 417 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
KRIS ANTHONY WALTON

Applicant

AND:
THE OFFICIAL RECEIVER

First Respondent

MR NICK JIM COMBIS

Second Respondent

order made by:

JUDGE EGAN

DATE OF ORDER:

23 December 2022

IT IS DECLARED THAT:
1.The transfer of $170,010 from Robert Alexander Simpson to the Applicant on 30 April 2020 is a transaction that is void against the Second Respondent / Cross-Claimant pursuant to section 121 of the Bankruptcy Act 1966 (Cth).

IT IS ORDERED THAT:
2.The Applicant is to pay the Second Respondent / Cross-Claimant the sum of $170,010 within 28 days of this order.
3.The Applicant is to pay the Second Respondent / Cross-Claimant’s costs taxed on the standard basis in an amount to be agreed, or failing agreement, to be assessed.

Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Egan
Introduction

The second respondent was relevantly the trustee of the bankrupt estate of one Robert Simpson.
The applicant was at all relevant times in a relationship with Mr Simpson’s daughter, and he lived with her and their respective children.
It is not in dispute that on 23 August 2016, the applicant paid the sum of $170,321.03 by bank transfer into a bank account held in the name of Beama Pty Ltd. That company was a company controlled by Mr Simpson, who was its sole director.
At all material times Mr Simpson was the registered proprietor of a property situated at 18…

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.

Continue reading Walton v The Official Receiver

Details

AGLC: Walton v The Official Receiver [2022] FedCFamC2G 1075
Case: [2022] FedCFamC2G 1075
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, Walton v The Official Receiver [2022] FedCFamC2G 1075, the court was asked to decide whether a payment of $170,010 from Robert Simpson to Kris Walton was a voidable transfer under the Bankruptcy Act 1966 (Cth). The Official Receiver, as trustee of Simpson's bankrupt estate, issued a notice under s. 139ZQ of the Act requiring Walton to repay the money to the estate. Walton sought to set aside the notice, claiming the payment was for renovations to Simpson's property, while Simpson claimed it was a loan repayment.

The court found that Walton had failed to satisfy the Court that the payment was for renovations, as there was no documentary evidence of the work being done or the total cost. Simpson's evidence that he had not had personal bank accounts at the time was also found to be false, as bank statements showed he had at least two active accounts. The Court concluded that the payment was a voidable transfer under s. 121 of the Act, as Simpson's main purpose in making the payment was to prevent the money from being available to his creditors, and he knew he was insolvent at the time.

Accordingly, the Court dismissed Walton's application to set aside the notice, but granted the Official Receiver's cross-claim for a declaration that the payment was a voidable transfer under s. 121 of the Act. The Court will hear further submissions on orders to recover the money and costs from Walton.

Orders