Ashton, Andrew Craig v Prentice, Maxwell William & Ors [1998] FCA 1583

Ashton, Andrew Craig v Prentice, Maxwell William & Ors [1998] FCA 1583

The lease was not a sham as there was no common intention for it to be ineffective; however, on voiding the fraudulent transfer, the property vested in the trustee as at the date of bankruptcy, so the lease (entered into after the commencement of bankruptcy) is void against the trustee by operation of s 121 and the principles of relation back. The lessees were not bona fide purchasers and thus receive no statutory protection.

Jurisdiction
Australia
Judgment Date
11 December 1998
Procedural Posture
Bankruptcy Application and Cross Claim / Post Trial Judgment and Orders
Outcome
Transfer to first cross respondent and lease declared void as against cross claimant (trustee); orders for possession and costs made.
Legal Topics
['fraudulent Conveyance' 'voidable Transactions' 'effect of Relation Back in Bankruptcy' 'construct of Sham Transactions' 'leases in Bankruptcy']
['bankruptcy' 'property Law'] ['fraudulent Conveyance' 'voidable Transactions' 'effect of Relation Back in Bankruptcy' 'construct of Sham Transactions' 'leases in Bankruptcy']

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Procedural Posture

Bankruptcy Application and Cross Claim / Post Trial Judgment and Orders

Legal Issues

  1. 1 ["Whether the lease granted by the applicant to the bankrupt and bankrupt's family was a sham" 'Whether the lease was void as against the trustee in bankruptcy given the relation back provisions' 'Effect of sections 115 and 121 Bankruptcy Act 1966 (Cth) on the property and interests concerned']

Ratio Decidendi

The lease was not a sham as there was no common intention for it to be ineffective; however, on voiding the fraudulent transfer, the property vested in the trustee as at the date of bankruptcy, so the lease (entered into after the commencement of bankruptcy) is void against the trustee by operation of s 121 and the principles of relation back. The lessees were not bona fide purchasers and thus receive no statutory protection.

Court Disposition

Transfer to first cross respondent and lease declared void as against cross claimant (trustee); orders for possession and costs made.

Orders

  • ['Declaration that transfer pursuant to 8 August 1995 contract and said contract are void as against cross claimant.' 'Declaration that the residential tenancy agreement dated 1 July 1997 is null and void.' 'First cross respondent to execute a direction to pay.' 'Cross claimant to serve copies of orders and reasons...