Re Wills, J. v. Ex parte Wills, J.F. & Anor (Trustee in Bankrupty) [1987] FCA 597

Re Wills, J. v. Ex parte Wills, J.F. & Anor (Trustee in Bankrupty) [1987] FCA 597

The mortgages granted by Wills to Beneficial Finance Corporation Ltd. were settlements, but they were made in good faith and for valuable consideration because Beneficial lent $463,500 to Wills as trustee of the Wills Family Trust to finance the Motel purchase. They therefore fell within s.120(1)(a) and were not void against the Official Trustee; the sale proceeds paid to Beneficial pursuant to those mortgages were not void settlements, and Pranbridge had no liability to contribute to Wills. Wills purchased the Motel, furniture and fittings as trustee of the Wills Family Trust, and Pranbridge later held and sold the furniture and fittings as trustee, so the $14,000 and accrued interest in...

Jurisdiction
Australia
Judgment Date
04 November 1987
Procedural Posture
Bankruptcy Applications / Reasons for Judgment and Minutes of Order After Hearing of Two Applications Heard Together
Outcome
The Official Trustee's application dated 23 December 1986 was refused; Pranbridge was held entitled to the bank funds and awarded costs; the application dated 24 July 1986 by Jack Franklin Wills and Annette Joan Wills was refused with no order for costs.
Legal Topics
['void Settlements' 'valuable Consideration' 'mortgages' 'trust Property' 'vesting of Bankrupt Property' 'trustee Indemnity']
['bankruptcy' 'trusts' 'property Law'] ['void Settlements' 'valuable Consideration' 'mortgages' 'trust Property' 'vesting of Bankrupt Property' 'trustee Indemnity']

Case Brief

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Procedural Posture

Bankruptcy Applications / Reasons for Judgment and Minutes of Order After Hearing of Two Applications Heard Together

Legal Issues

  1. 1 ['Whether mortgages granted by Wills to Beneficial Finance Corporation Ltd. over three lots of land were settlements void as against the Official Trustee under s.120 of the Bankruptcy Act 1966.' 'Whether payment of the net proceeds of sale of the three lots to Beneficial Finance Corporation Ltd. was a settlement void as against the Official Trustee.' 'Whether Pranbridge was obliged to contribute to Wills for the payments made to Beneficial Finance Corporation Ltd.' 'Whether Wills, and later Pranbridge, held the Motel furniture and fittings as trustee of the Wills Family Trust.' 'Whether the Official Trustee, Pranbridge, or Wills and his wife were entitled to the funds on interest bearing term deposit in the joint names of Pranbridge and the Official Trustee.']

Ratio Decidendi

The mortgages granted by Wills to Beneficial Finance Corporation Ltd. were settlements, but they were made in good faith and for valuable consideration because Beneficial lent $463,500 to Wills as trustee of the Wills Family Trust to finance the Motel purchase. They therefore fell within s.120(1)(a) and were not void against the Official Trustee; the sale proceeds paid to Beneficial pursuant to those mortgages were not void settlements, and Pranbridge had no liability to contribute to Wills. Wills purchased the Motel, furniture and fittings as trustee of the Wills Family Trust, and Pranbridge later held and sold the furniture and fittings as trustee, so the $14,000 and accrued interest in...

Court Disposition

The Official Trustee's application dated 23 December 1986 was refused; Pranbridge was held entitled to the bank funds and awarded costs; the application dated 24 July 1986 by Jack Franklin Wills and Annette Joan Wills was refused with no order for costs.

Orders

  • ['The declaration and orders sought by the Official Trustee in his application dated 23 December 1986 be refused.' 'Pranbridge is entitled to the funds on interest bearing term deposit with the Commonwealth Trading Bank of Australia in the joint names of Pranbridge and the Official Trustee.' "The Official Trustee...