Young v Turner
[2003] FMCA 144
•24 April 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| YOUNG v TURNER | [2003] FMCA 144 |
| BANKRUPTCY – Application under s.319ZQ – whether bankrupt solvent when transfer occurred – whether requirements of s.121 of Bankruptcy Act fulfilled – whether applicant could establish any equity or right of contribution against the bankrupt – calculation of bankrupt’s interest in transferred property – tracing of interest into property of applicant – whether s.319ZQ Notice was invalid and should be set aside. |
Bankruptcy Act 1966 (Cth), ss.120, 121, 139ZQ, 139ZS
Alden John Halse as Trustee of the property of Neville Ross Payne, a Bankrupt v Michael Norman Norton [1997] 673 FCA
Re Lucera; Ex parte Official Trustee v Lucera (1994) 53 FCR 329
Re Aley; Ex parte Sweeney & Aley (1996) 63 FCR 294
Lin v Official Trustee In Bankruptcy [2001] FMCA 106
Calverley v Green (1984) 155 CLR 242
Re Jury; Ashton v Prentice (1999) 92 FCR 68
Prentice v Cummins (No 5) [2002] FCA 1503
Forgeard v Shanahan (1994) 35 NSWLR 206
Ryan v Dries (2002) NSWCA 3
Official Trustee in Bankruptcy v Richie No 2 unreported BC8801284 SC NSW
Ingram v Ingram (1994) VLR 95
| Applicant: | GRACE YOUNG |
| First Respondent: | GEOFFREY TURNER |
| Second Respondent: | THE OFFICIAL RECEIVER FOR THE BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES |
| File No: | SZ 1068 of 2002 |
| Delivered on: | 24 April 2003 |
| Delivered at: | Sydney |
| Hearing date: | 14 April 2003 |
| Judgment of: | Raphael FM |
REPRESENTATION
| Solicitors for the Applicant: | Mr S Golledge of Argyle Partnership |
| Counsel for the Respondent: | Mr C Newlinds |
| Solicitors for the Respondent: | Sally Nash & Co. |
ORDERS
The Court declares:
That the Notice under s.139ZQ of the Bankruptcy Act issued against the applicant is invalid.
The applicant is entitled to the sum of $404,054.75 from the sum of $594,109.05 representing part of the proceeds of sale of 690 Malabar Road, Maroubra.
The transfer of $190,054.30 from the sale of the Maroubra property to the applicant is void against the Trustee (1st respondent).
The Court orders:
That the Notice under s.139ZQ of the Bankruptcy Act dated 23 August 2002 (as amended) be set aside.
There be judgment for the first respondent against the applicant in the sum of $190,054.30 and interest at Federal Court rates from 23 August 2002.
The property known as 6 Edgar Street, Strathfield be charged in the sum of $93,670.26 as security for the judgment in (5) above.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SZ 1068 of 2002
| GRACE YOUNG |
Applicant
And
| GEOFFREY TURNER |
First Respondent
And
| THE OFFICIAL RECEIVER FOR THE BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES |
Second Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings involve an application by Grace Young for an order under s.139ZS of the Bankruptcy Act 1966 (Cth) (the “Act) that a s.139ZQ Notice issued by the second respondent dated 23 August 2002 be set aside. The first respondent, who is the trustee of the bankrupt estate of Mr David Young, has followed the usual course of filing a cross-claim seeking a number of declarations and consequential relief. The declarations would have the effect of confirming that the transactions impugned by the s.139ZQ Notice were void against the trustee under either ss.120 or 121 of the Act. The consequential orders relate to payment and the charging of a property into which it is alleged the moneys from the void transfer could be traced.
In Alden John Halse as Trustee of the property of Neville Ross Payne, a Bankrupt v Michael Norman Norton [1997] 673 FCA the nature of these proceedings and the onus of proof was discussed:
“Section 139ZS has been construed as a provision by which an application is made under that section initiates litigation appropriate to resolve a dispute between the trustee and the third party. Then on that construction it would follow, unless the Act provided to the contrary, that the onus of proof in that litigation would be as provided in Division 3 of the Act. Therefore where an application under s.139ZS involves a dispute between the trustee and the person served with the notice as to the application of Division 3 to a transaction, the onus will be on the trustee to satisfy the court that the provisions for Division 3 so apply, subject to express contrary provisions such as those set out in subs.120(2) and subs.120(5), subs.122(3), subs.123(2) and subs.124(2) of the Act which place the onus of proof of certain matters on the person seeking to uphold the transaction.”
The hearing proceeded by way of the respondent trustee setting out to establish validity of the trustee’s claims under ss.120 and 121 of the Act. If I was not so satisfied, or if the s.139ZS Notice was revealed to be defective in other ways then I would be obliged to set aside the notice: Re Lucera; Ex-parte Official Trustee v Lucera (1994) 53 FCR 329, Re Aley; Ex-parte Sweeney & Aley (1996) 63 FCR 294, Lin v Official Trustee in Bankruptcy [2001] FMCA 106.
History
The applicant married the bankrupt on 14 November 1973. They separated in 1983 at which time they were living in a house at 2 Harry Avenue, Lidcombe. The applicant remained living in that house with the children of the marriage. On 18 July 1984 the applicant and the bankrupt divorced. They did not enter into any property settlement. On 29 September 1986 the applicant purchased a vacant block known as Lot 11 Frederick Street Lidcombe for $42,500.00. The applicant gave evidence that she took on the full liability for the mortgage of Harry Avenue after the bankrupt left the premises in 1983. She could not be exact but she indicated that the payments were $300.00 per month. She saved the money for the Frederick Street purchase from rent received from lodgers and her holding down three jobs.
In 1987 the applicant and the bankrupt resumed co-habitation. They jointly borrowed money to build a house on the Frederick Street property and they sold the Harry Avenue property in 1988. The proceeds of sale of Harry Avenue were used to repay the mortgage on Frederick Street which remained in the sold legal ownership of the applicant.
The applicant and the bankrupt never remarried but they continued to live together until 1999. During that time they entered into a series of business ventures together which included the buying and selling of properties in New South Wales and Queensland, the ownership of a cafe, the ownership of a sate business and the ownership, in partnership with others, of a successful Chinese seafood restaurant in Hurstville. Through a family trust they also owned a share in the property in which the Hurstville restaurant was situated.
The applicant and the bankrupt also engaged in share trading. They did this through a firm of stockbrokers which provided them with access to funds from an entity known as Leveridge Equities. Their obligations to this entity were joint but their share trading activities were separate. Mr Young had his account and Mrs Young had hers. They had separate accounts with the stockbroker. Mr Young also had an interest in another Chinese restaurant with partners in which the applicant was not involved. The three partners were joint guarantors of a lease and it was their failure to comply with their obligations thereunder that led to the proceedings in the District Court of New South Wales which resulted in the judgment upon which the bankruptcy proceedings against the bankrupt were founded.
In 1992 Mr and Mrs Young bought a vacant block of land at Maroubra for $250,000.00. The land was purchased in joint names with $50,000.00 of joint funds and a mortgage of $200,000.00 from Westpac. In 1993 Frederick Street was sold for $260,000.00. This property had remained in the sole ownership of Mrs Young and she used $200,000.00 of the settlement moneys to repay the mortgage from Westpac on Maroubra. Shortly thereafter, the parties borrowed money from Westpac to use in the building of a house on the Maroubra property.
In April 1998 the bankrupt and his partners guaranteed the obligations of GSCC Restaurant Pty Limited to AE & SJ Bowden in respect of certain premises at 350 Forest Road Hurstville. The company fell into default and on 28 September 1998 the bankrupt was informed that he would be joined as a party to any action under the guarantee. Proceedings under the guarantee were commenced by the filing of a Statement of Claim in the District Court on 31 March 1999, served on the bankrupt on 4 April. The bankrupt defended the proceedings. He filed a defence on 11 May and appears to have taken a reasonably active part in the proceedings in which he was represented, up until the time they were first due to be heard in or about May 2000. The proceedings were not reached on that day and they were heard on
17 July 2000 when judgment in the sum of $147,409.90 was entered against the bankrupt. In the meantime the applicant and the bankrupt had ceased co-habitation and they had sold the Maroubra property. They had also sold the Hurstville property in which they were part owners through the family trust. The proceeds of sale of these properties were used to retire all secured debts from Westpac. In July 1999 the applicant received the balance of proceeds of sale of Maroubra in the sum of $594,109.05 and the deposit moneys in the sum of $69,223.12.
The net proceeds of sale of Maroubra were applied in the following manner:
·AGC account opened in the name of Grace Young with a deposit of $500,000.00.
·Westpac account of Grace Young opened with a deposit of $34,109.05.
·Westpac joint account of Grace and David Young into which was deposited $69,223.12.
·Leveridge Equities paid $60,000.00.
It is accepted that funds from the sale of the property which went to Mrs Young were used to pay Mr Young’s personal obligations on his credit cards and one personal obligation to his stockbroker.
On 5 August 1999 Grace Young paid Leveridge Equities $20,000.00 from her Westpac account in diminution of the joint debt of herself and Mr Young resulting from Mr Young’s unsuccessful share trading. On 7 September 1999 $50,000.00 was redeemed from the AGC account, paid into Grace Young’s Westpac account and then to Leveridge Equities for the same reason. On 20 September 1999 a further $100,000.00 was applied in the same manner.
In December 1999 the applicant purchased a property in Strathfield for approximately $600,000.00 of which $292,719.57 came from her AGC account and the balance was borrowed from HSBC. This property was again purchased in her own name as the parties were no longer co-habiting.
The sequestration order was made against the bankrupt on 8 March 2002.
Evidence
The trustee, Mr Turner, gave evidence on affidavit and was cross-examined. He deposed that the only debt revealed in the Statement of Affairs of the bankrupt was that to the Bowdens plus approximately $23,000.00 on various credit cards and $1,400.00 to a mobile phone company. The trustee admitted that if, as was asserted by him, the bankrupt had $330,000.00 from the proceeds of sale of the Maroubra property he was, as at the date of the transfer, solvent because his then indebtedness to the Bowdens (which at that time was defended), and his other creditors, which included Leveridge Equities, was less than the amount he “received” from his half share of the Maroubra property.
Mrs Young gave evidence upon her affidavits. She also gave oral evidence that the bankrupt had asked her to make the payments that were made in August and September 1999 on his behalf, that she had not asked him to repay any of this money and she had not lodged a proof of debt. Mrs Young also stated that she intended to transfer her equity from the Lidcombe property to the Maroubra property so she could use it as her own share in the Maroubra property.
In cross-examination the applicant confirmed that she knew that the bankrupt had signed a guarantee in respect of the Hurstville premises and was being sued upon it. She accepted that as at 16 July 1999 the only asset which the bankrupt owned was his share in the Maroubra property and his only ability to pay his creditors was from his interest in that property. She said that the bankrupt had asked her to pay his debts after settlement and she also pointed out that the bankrupt had enough money from his share of the sale of the property in the family trust to pay what he considered to be his share of any obligation to the Bowdens. The applicant accepted that her and her husband’s assets and liabilities were pooled and debts were paid from the pooled funds. They didn’t normally separate their assets and liabilities but she said that she had told her husband that she had a greater interest in Maroubra than he did because she was putting her Frederick Street money into it.
Claim under Section 120
The relevant parts of s.120 are in the following form:
“120. Transfers that are void against trustee
(1) A transfer of property by a person who later becomes a bankrupt (the “transferor”) to another person (the “transferee”) is void against the trustee in the transferor’s bankruptcy if:
(a)the transfer took place in the period beginning 5 years before the commencement of the bankruptcy and ending on the date of the bankruptcy; and
(b)the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property.
Transfers that are not void
(3) Despite subsection (1), a transfer is not void against the trustee if:
(a)the transfer took place more than 2 years before the commencement of the bankruptcy; and
(a)the transferee proves that, at the time of the transfer, the transferor was solvent.
Refund of consideration
(4) The trustee must pay the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee.
What is not consideration
(5) For the purposes of subsections (1) and (4), the following have no value as consideration:
(a) the fact that the transferee is related to the transferor;
(b)if the transferee is the spouse or de facto spouse of the transferor – the transferee making a deed in favour of the transferor;
(c)the transferee’s promise to marry, or to become the de facto spouse of, the transferor;
(d) the transferee’s love or affection for the transferor.
Meaning of “transfer of property” and “market value”
(7) For the purposes of this section:
(a)“transfer of property” includes a payment of money; and
(b)a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and
(c)the “market value” of property transferred is its market value at the time of the transfer.”
The trustee argues that the factual matrix previously described establishes that a transfer of property took place by the bankrupt to the applicant when the proceeds of sale of the Maroubra property were placed into accounts owned by the applicant. This transfer took place within a period beginning five years before the commencement of the bankruptcy and the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property. The applicant argues that this is not the case. She says that the consideration for the transfer of the funds was her promise to pay to those creditors of the bankrupt who were paid the amounts which were paid. Alternatively, the applicant argues that she was a bare trustee of the moneys on behalf of the bankrupt for whom she made the payments. The applicant also argues, again in the alternative, that even if she did receive this money beneficially she was entitled to a good part of it by virtue of her equities as against the bankrupt arising out of the provision by her of funds used to pay down the mortgage of $200,000.00 following the sale of Frederick Street in February 1993: Calverley v Green (1984) 155 CLR 242; Lin v Official Trustee in Bankruptcy (supra).
Although I will have to go into these matters in connection with the claim under s.121 I do not believe it is necessary to go into them in respect of the claim under s.120 because I am satisfied that the transferee has proved that at the time of the transfer the transferor was solvent and that the transfer took place more than two years before the commencement of the bankruptcy. This brings the transfer outside the scope of s.120. I am satisfied that as at the date of the transfer the bankrupt had sufficient funds in his control to pay his debts as and when they fell due even assuming that the whole of the Bowden debt was required to be paid by him as at that date. I obtained this degree of satisfaction from the admissions by the trustee previously referred to and the evidence concerning the status of the debtor’s Leveridge Equities account at that time. The claim pursuant to s.120 of the Act is not sustainable.
Claim under Section 121
Section 121 is relevantly in the following form:
“121. Transfers that are void
(1) A transfer of property by a person who later becomes a bankrupt (the “transferor”) to another person (the “transferee”) is void against the trustee in the transferor’s bankruptcy if:
(a)The property would probably have become part of the transferor’s estate or would probably have been available to creditors if the property had not been transferred; and
(b)The transferor’s main purpose in making transfer was:
(i)to prevent the transferred property from becoming divisible among the transferor’s creditors; or
(ii)to hinder or delay the process of making property available for division among the transferor’s creditors.
Showing the transferor’s main purpose in making a transfer
(2) The transferor’s main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent.
Other ways of showing the transferor’s main purpose in making a transfer
(3) Subsection (2) does not limit the ways of establishing the transferor’s main purpose in making a transfer.
Transfer not void if transferee acted in good faith
(4) Despite subsection (1), a transfer of property is not void against the trustee if:
(a)the consideration that the transferee gave for the transfer was at least as valuable as the market value of the property; and
(b)the transferee did not know that the transferor’s main purpose in making the transfer was the purpose described in paragraph (1)(b); and
(c)the transferee could not reasonably have inferred that, at the time of the transfer, the transferor was, or was about to become, insolvent.
What is not consideration
(6) For the purposes of subsections (4) and (5), the following have no value as consideration:
(a)the fact that the transferee is related to the transferor;
(b)if the transferee is the spouse or de facto spouse of the transferor – the transferee making a deed in favour of he transferor;
(c)the transferee’s promise to marry, or to become the de factor spouse of, the transferor;
(d)the transferee’s love or affection for the transferor.
Meaning of “transfer of property” and “market value”
(9) For the purposes of this section:
(a)“transfer or property” includes a payment of money; and
(b)a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and
(c)the “market value” of property transferred is its market value at the time of the transfer.”
The trustee argues that the funds from the Maroubra property which were distributed to the applicant, would probably have become part of the transferor’s estate or would probably have been available to creditors if the transfer had not taken place. He also argues that the bankrupt’s main purpose in making the transfer was to prevent the transferred property from becoming divisible amongst his creditors. It is the trustee’s case that either the applicant or the bankrupt did not wish to pay the Bowden debt although they were happy to pay all the bankrupt’s other debts, the majority of which were joint debts.
A transferor may have the main purpose even if he had no creditors or was able to satisfy all the creditors, at the date of the transfer. A transferor may have been aware of an impending liability which had not crystallised into an existing liability at the date of the transfer: Re Jury; Ashton v Prentice (1999) 92 FCR 68; Prentice v Cummins(No 5) [2002] FCA 1503.
The trustee argues that he is able to take advantage of the deeming provisions in s.121(2). He says the effect of the transfer was to leave the bankrupt with no assets. In fact, the bankrupt did have an asset, being his share of the proceeds of sale of the Hurstville property although that would have been needed to cover existing personal liabilities. It would not have covered the judgment which was eventually given against him in a favour of the Bowdens. It seems to me that the effect of the transfer was to render him insolvent. If I am wrong about that I also think that the bankrupt had the necessary intent required by s.121(1)(b). It is to be remembered that up until that time (and with the exception of the period during which the applicant and the bankrupt lived apart), the affairs of the applicant and the bankrupt were run jointly. The applicant did not have a separate bank account. What was the purpose of placing all this money into an account in her name alone? Mr Golledge suggests it was placed there on bare trust to pay the bankrupt’s creditors or under an agreement between the parties that those payments would be made, which they were. But that does not explain why people who previously were happy to operate joint accounts suddenly opting to operate an account in one name only. Mr Newlinds points to the fact that the only bills that were paid were joint obligations. That is not strictly the case. A bill from a stockbroker that was the bankrupt’s sole responsibility was paid and some credit cards were paid. But one is left with the feeling that on the balance of probabilities the most likely reason for the arrangement was to keep money away from the Bowdens. Mr Golledge argues that if this is the case it was a very ill thought out scheme and that somehow militates against the possibility. It was an ill thought out scheme. If his share of the money had been paid into a bank account in the sole name of the bankrupt there would be no claim against the applicant, only the possibility (and a faint possibility at that) of a preference action against the recipients of the funds. The road to Carey Street is littered with the corpses of people who have entered into ill conceived schemes. The applicant and the bankrupt would not be the first nor the last to fall that way.
I am not satisfied of the matters set out in s.121(4). This finding follows from the finding I have made as to the parties’ intention. In those circumstances I am satisfied that the trustee would have a claim under s.121. It is now necessary to consider the extent of that claim.
The equities
It is the applicant’s case that she has an equity in the proceeds of sale of the Maroubra property in excess of her 50%. It is said that in February 1993 the applicant made a $200,00.00 payment to discharge the mortgage on the land and a $15,000.00 payment to the builder for construction of improvements to the property. The total cost of the improvements far exceeded $15,000.00. Presumably this was the starting payment required by the builder. The payment which the applicant made came from funds arising out of the sale of her solely owned property at Frederick Street. It is settled law that the basis under which parties hold property is settled at the time of the purchase. But if one party provides additional funds which has the effect of increasing the value of the owners’ interest in the property, then in the absence of agreement to the contrary, the party will be entitled to reimbursement from the other party of that party’s share of those payments: Calverley and Green (supra); Forgeard v Shanahan (1994) 35 NSWLR 206; Ryan v Dries (2002) NSWCA 3; Official Trustee in Bankruptcy v Richie No 2 unreported BC8801284 SC NSW. The applicant argues that her share of these moneys is $107,500.00.
The trustee argues that the simple fact is that the Maroubra property was purchased by Mr and Mrs Young as joint tenants and the purchase price was provided by them equally, either by way of joint funds or joint borrowings. The fact that Mr and Mrs Young may or may not have made unequal payments in respect of a mortgage over the property is also irrelevant. In support of that latter contention the trustee cites Calverley v Green at 495 of the report found at 56 ALR 483. I am satisfied that that quotation relates to the division of interests in the property and not to the creation of an equity of exoneration or contribution which arises when one party makes disproportionate payments: Ingram v Ingram (1941) VLR 95 at 102.
As an alternative to this argument the trustee says that the bankrupt paid the mortgage on the Frederick Street property and took responsibility for the joint debt of $65,000.00 for building the house. The trustee also says that the evidence points to the fact that the parties’ assets and liabilities were all pooled and as they were unable to show either an express intention to alter the assumption that they owned everything jointly both legally and beneficially or some unconscionability, the applicant cannot obtain the benefit of the equity.
The applicant in her evidence said that she told her husband that she was putting in her money from Frederick Street to assure her equity in Maroubra. I think that is probably right. The parties had already separated once, they were to separate again. The applicant is a shrewd business woman and it is highly probable that she wished to protect the nest egg she had created for herself in Frederick Street. I am satisfied that she is entitled to an equity in the sum of $107,500.00.
The possibility of a bankrupt’s equity is more problematical. It is said that “He paid the mortgage” but in fact no evidence of this was given and the probabilities are that the mortgage was paid from a joint account. He says that he took responsibility for a half share of the $65,000.00 debt. That debt was repaid when Harry Avenue was sold. The applicant says that she had an equity in addition to her half share in Harry Avenue because she had paid the mortgage for nearly five years during the time that her husband was no longer living with her. The evidence on this is that the payments were approximately $300.00 per month. The trustee argues that if these payments are to be taken into account then the bankrupt is entitled to a set off for occupation. That argument was made late in the day and again no figures were provided.
Part of Exhibit “D” is an internal memorandum of the Westpac Banking Corporation dated 20 January 1993. Its subject was the sale of the Lidcombe property and the clearance of the BAL facility of $200,000.00 for the purchase of the Maroubra land and a request for a WHL loan of $250,000.00 to finalise the erection of the Maroubra dwelling. This document indicates that the Lidcombe property was “sold for $260,000.00 and should clear $248,000.00”. Thus $48,000.00 was placed into the joint funds of the applicant and the bankrupt. In regard to the bankrupt’s equity arising out of Frederick Street I am not satisfied that there was either the necessary agreement to provide him with this benefit nor the necessary element of unconscionability. I think it was the intention of the parties that the fund of $200,000.00 which was used to repay the Maroubra loan was the applicant’s money with the balance of the proceeds of Lidcombe being used for joint purposes which effectively dealt with any residual rights that the bankrupt may have had. My finding in this regard is therefore that the applicant has an equity in the funds transferred to her of $107,500.00.
Application of the findings to the proceedings
The s.139ZQ Notice is invalid and must be set aside. The notice refers to a claim under s.120 which I have found not to be maintainable and in regard to the claim under s.121 I found that the figure demanded by the notice is to be reduced.
I would find that of the amount of $594,109.05 disbursed to the applicant on the sale of the Maroubra property the applicant was entitled to $404,054.75.
I would find that the transfer to the applicant from the proceeds of the sale of the Maroubra property of the sum of $190,054.30 is void against the trustee pursuant to s.121 of the Act.
I would give judgment for the cross-claimant Geoffrey Turner against the applicant Grace Young in the sum of $190,054.30 with interest from the date of the issue of the s.139ZS Notice on 23 August 2002. The interest is to be calculated pursuant to the Federal Court Act and Rules.
The trustee seeks an order that the property at 6 Edgar Street Strathfield being Folio Identifier 137/12405 be charged in favour of the trustee in the amount which I find to be owed by the applicant to the trustee. The trustee argues that this amount can be traced from the proceeds of sale of Maroubra into the Strathfield property. The applicant argues that only one half of whatever money went into Strathfield is capable of being charged over the property and the balance is a debt in personam. I assume that this submission was made based upon the original proportions in which the parties owned the Maroubra property. I think the appropriate apportionment should be in the ownership of the fund which was used. I have said that out of the total fund of $594,109.05 the applicant was entitled to $404,054.75 and the bankrupt was entitled to $190,054.30. That is a proportion of 68% to 32%. On this basis the trustee’s entitlement in respect of the $292,719.57 used to purchase the Strathfield property is 32% or $93,670.26. That is the figure for which a charge will be ordered.
The trustee asks for an order for vacant possession of the Strathfield property. I do not believe it was significantly pressed at the hearing. It is not an order I am prepared to make at the present time. The applicant must have an opportunity to make payment of the amount ordered.
The trustee has asked that the applicant pay her costs on an indemnity basis. I will hear the parties as to costs. However, I am of the preliminary view that the appropriate order is that there should be no order. This is because the applicant was substantially successful on her application and was successful in part in her defence of the cross-claim. On the other hand I have found that there is money owed by the applicant to the trustee. If either party wishes me to make an order for costs then it must provide my associate within seven days with written submissions.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Raphael FM
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