Yeo & Rambaldi (as trustees of the bankrupt estate of Arifovic) v Arifovic & Anor (No.2)

In the matter of *Yeo & Rambaldi (as trustees of the bankrupt estate of Arifovic) v Arifovic & Anor (No.2)*, the applicants, the trustees of the bankrupt estate of Mr. Arifovic, sought to recover assets allegedly transferred by Mr. Arifovic to his wife and a company controlled by her, prior to his bankruptcy. The respondents were Mr. Arifovic's wife and the company. The dispute concerned the validity of these transfers and whether the assets remained part of Mr. Arifovic's bankrupt estate. The proceeding was heard by Judge Wilson in the Federal Court of Australia.

The primary legal issues before the Court were whether the transfers of certain shares and a property from Mr. Arifovic to his wife and the company were voidable transactions under the *Bankruptcy Act 1966* (Cth), specifically as uncommercial transactions or as transfers made for the purpose of preventing the property from becoming divisible among his creditors. The Court was required to determine the true nature of the transactions, the consideration provided, and the intention of Mr. Arifovic at the time of the transfers.

Judge Wilson found that the transfers of shares and the property were indeed uncommercial transactions and were made with the intention of defeating or delaying creditors. The Court applied the principles of voidable transactions under the *Bankruptcy Act*, considering the financial position of Mr. Arifovic at the time of the transfers and the lack of adequate consideration. The Court was satisfied that the transactions were not made in the ordinary course of business and that the dominant purpose was to remove assets from the reach of creditors.

The Court ordered that the transfers of the shares and the property be set aside as voidable transactions. The respondents were ordered to deliver up possession of the property and to transfer the shares back to the trustees of the bankrupt estate. The respondents were also ordered to pay the costs of the proceeding.