Williams v Lloyd [1934] HCA 1

Williams v Lloyd [1934] HCA 1

The 6 January 1926 memorandum failed as a present gift and did not operate as a declaration of trust; no interest in shares passed to wife or daughter. The 27 November 1926 settlement, though voluntary, was not proved to have been executed with an intent to defraud creditors and was not impeachable under s 37a of the Conveyancing Act 1919-1930 (NSW) or 13 Eliz. c.5. The 1929 transfer of money to a Savings Bank account in the names of wife and daughter, and the mortgage in daughter's favour, constituted settlements within s 94 of the Bankruptcy Act 1924-1932, and were void against the official receiver. Subsequent conduct could not retrospectively create trusts for the earlier settlements.

Parties
Bankrupt/deceased: Henry Morgan Williams; Wife of Bankrupt/deceased: Jane Williams; Son/respondent/executor: David Williams; Daughter/respondent/executrix: Rosina Williams; Daughter/respondent: Winifred Williams; Official Receiver/applicant: Charles Fairfax Waterloo Lloyd; Advocate for Respondents/appellants: Loxton K.C. with Gain and Donovan
Jurisdiction
Australia
Procedural Posture
Bankruptcy Appeal / Appeal From the Court of Bankruptcy (district of New South Wales and the Territory for the Seat of Government) to the High Court of Australia
Outcome
Mixed—part allowed, part dismissed. Orders of the Court of Bankruptcy varied in part (in relation to the November 1926 settlement), affirmed in part (as to other dispositions). Damages/costs orders varied as indicated.
Legal Topics
Voidable Dispositions in Bankruptcy, Intent to Defraud Creditors, Voluntary Settlements, Declarations of Trust, Alienation of Property
Bankruptcy Property Law Equity and Trusts Voidable Dispositions in Bankruptcy Intent to Defraud Creditors Voluntary Settlements Declarations of Trust Alienation of Property

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Parties

Henry Morgan Williams

Bankrupt/deceased

Jane Williams

Wife of Bankrupt/deceased

David Williams

Son/respondent/executor

Rosina Williams

Daughter/respondent/executrix

Winifred Williams

Daughter/respondent

Charles Fairfax Waterloo Lloyd

Official Receiver/applicant

Loxton K.C. with Gain and Donovan

Advocate for Respondents/appellants

Procedural Posture

Bankruptcy Appeal / Appeal From the Court of Bankruptcy (district of New South Wales and the Territory for the Seat of Government) to the High Court of Australia

Legal Issues

  1. 1 Whether various dispositions or settlements by the bankrupt were void as against the official receiver under s 94(1) of the Bankruptcy Act 1924-1932, s 37a Conveyancing Act 1919-1930 (NSW), or 13 Eliz. c.5, due to intent to defraud creditors or as voluntary settlements upon bankruptcy.
  2. 2 Whether a declaration of trust or memorandum of agreement was effective in transferring interest in shares or property to family members.
  3. 3 Whether gifts or transfers near insolvency constituted settlements avoided by the Bankruptcy Act.

Ratio Decidendi

The 6 January 1926 memorandum failed as a present gift and did not operate as a declaration of trust; no interest in shares passed to wife or daughter. The 27 November 1926 settlement, though voluntary, was not proved to have been executed with an intent to defraud creditors and was not impeachable under s 37a of the Conveyancing Act 1919-1930 (NSW) or 13 Eliz. c.5. The 1929 transfer of money to a Savings Bank account in the names of wife and daughter, and the mortgage in daughter's favour, constituted settlements within s 94 of the Bankruptcy Act 1924-1932, and were void against the official receiver. Subsequent conduct could not retrospectively create trusts for the earlier settlements.

Court Disposition

Mixed—part allowed, part dismissed. Orders of the Court of Bankruptcy varied in part (in relation to the November 1926 settlement), affirmed in part (as to other dispositions). Damages/costs orders varied as indicated.

Orders

  • Allow appeal as to the order relating to the 27 November 1926 disposition and the property thereby comprised; discharge that order and dismiss the motion.
  • Vary the order relating to 6 January 1926 by striking out the first declaration and specifying delivery obligations as to scrip certificates; strike out the costs order; otherwise affirm and dismiss appeal.