Re Brown, P. v. Ex parte Taylor, A.R. [1987] FCA 270

Re Brown, P. v. Ex parte Taylor, A.R. [1987] FCA 270

The disposition of the funds and the land purchased with them was a voluntary settlement within two years before bankruptcy and not for valuable consideration. The s.120(1)(b) exception did not apply because the money settled on the children was Mrs Brown's own money, derived from the sale of land of which she was the sole owner, and did not accrue to her in right of her husband. The settlement was therefore void as against the trustee, and the vacant land belonged absolutely to the applicant as trustee of the bankrupt's property.

Jurisdiction
Australia
Judgment Date
27 May 1987
Procedural Posture
Bankruptcy Application by Trustee for Declarations That a Settlement Was Void as Against the Trustee / Reasons for Judgment and Orders in the Federal Court of Australia, General Division
Outcome
Application granted; declaration made that the vacant land belongs absolutely to the applicant as trustee of the property of the bankrupt, with a costs order against the respondent.
Legal Topics
['voluntary Settlement of Property' 'void Settlement as Against Trustee in Bankruptcy' 'settlement on Children of Settlor' 'property Accrued in Right of Spouse' 'matrimonial Property Settlement']
['bankruptcy' 'trusts' 'family Law'] ['voluntary Settlement of Property' 'void Settlement as Against Trustee in Bankruptcy' 'settlement on Children of Settlor' 'property Accrued in Right of Spouse' 'matrimonial Property Settlement']

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Procedural Posture

Bankruptcy Application by Trustee for Declarations That a Settlement Was Void as Against the Trustee / Reasons for Judgment and Orders in the Federal Court of Australia, General Division

Legal Issues

  1. 1 ['Whether the payment by Mrs Brown into accounts held by her as trustee for her children constituted a settlement void as against the trustee under s.120 of the Bankruptcy Act 1966.' 'Whether the settlement was saved by s.120(1)(b) as a settlement on the children of the settlor of property that accrued to the settlor after marriage in right of the spouse of the settlor.' 'Whether the vacant land purchased with the settled funds belonged absolutely to the applicant as trustee of the property of the bankrupt.']

Ratio Decidendi

The disposition of the funds and the land purchased with them was a voluntary settlement within two years before bankruptcy and not for valuable consideration. The s.120(1)(b) exception did not apply because the money settled on the children was Mrs Brown's own money, derived from the sale of land of which she was the sole owner, and did not accrue to her in right of her husband. The settlement was therefore void as against the trustee, and the vacant land belonged absolutely to the applicant as trustee of the bankrupt's property.

Court Disposition

Application granted; declaration made that the vacant land belongs absolutely to the applicant as trustee of the property of the bankrupt, with a costs order against the respondent.

Orders

  • ['The Court declares that property described as vacant land comprised in Certificate of Title Volume N1127 Folio 222 County of Carlisle Parish of Hector containing an area of 4080 square metres being Lot 125 on Registered Plan No.35290 of which the bankrupt is registered proprietor of an estate in fee simple as...