Re Racovitis, D.M. v Ex parte Official Trustee in Bankruptcy & Ors [1995] FCA 308

Re Racovitis, D.M. v Ex parte Official Trustee in Bankruptcy & Ors [1995] FCA 308

The application failed because s 120(1) rendered void only the bankrupt's settlement of her joint interest in the property and did not provide a basis to attack the mortgage granted by Con Racovitis to the first and second respondents. In any event, the applicant accepted a transfer from Con Racovitis pursuant to s 139ZQ(7) subject to the mortgage, which operated as compliance with the notice requiring payment. Further, the unchallenged evidence established that the first and second respondents' mortgage secured genuine loans and was given in good faith and for valuable consideration, so their interest was protected by s 120(7).

Jurisdiction
Australia
Judgment Date
15 May 1995
Procedural Posture
Bankruptcy Proceeding / Application for Declaration and Order Concerning Transfer of Land and Registered Mortgage
Outcome
Application dismissed with costs.
Legal Topics
['void Settlements Under S 120 of the Bankruptcy Act 1966' 'protection of Third Party Interests Acquired in Good Faith and for Valuable Consideration' 'notice Under S 139 ZQ of the Bankruptcy Act' 'registered Mortgage Over Land']
['bankruptcy' 'property Law'] ['void Settlements Under S 120 of the Bankruptcy Act 1966' 'protection of Third Party Interests Acquired in Good Faith and for Valuable Consideration' 'notice Under S 139 ZQ of the Bankruptcy Act' 'registered Mortgage Over Land']

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Procedural Posture

Bankruptcy Proceeding / Application for Declaration and Order Concerning Transfer of Land and Registered Mortgage

Legal Issues

  1. 1 ["Whether transfer registered no N376401T of the bankrupt's interest in 2 Sherwood Drive, Thomastown was void as against the applicant by operation of s 120 of the Bankruptcy Act 1966." "Whether s 120 of the Bankruptcy Act 1966 provided a basis to require the first and second respondents to discharge mortgage registered no P515914S over the applicant's equal undivided half share in the land." "Whether the first and second respondents' mortgage interest was protected by s 120(7) because it was acquired in good faith and for valuable consideration." 'Whether the applicant, having accepted a transfer pursuant to s 139ZQ(7) subject to the mortgage, could later attack the mortgage.']

Ratio Decidendi

The application failed because s 120(1) rendered void only the bankrupt's settlement of her joint interest in the property and did not provide a basis to attack the mortgage granted by Con Racovitis to the first and second respondents. In any event, the applicant accepted a transfer from Con Racovitis pursuant to s 139ZQ(7) subject to the mortgage, which operated as compliance with the notice requiring payment. Further, the unchallenged evidence established that the first and second respondents' mortgage secured genuine loans and was given in good faith and for valuable consideration, so their interest was protected by s 120(7).

Court Disposition

Application dismissed with costs.

Orders

  • ['The application will be dismissed with costs.']