Joanne Elizabeth Young v Josephine Aapa Smith [2015] NSWSC 400

Joanne Elizabeth Young v Josephine Aapa Smith [2015] NSWSC 400

The transfer of Mr Young's interest in the Property to Ms Smith on 7 August 2014 and the 2001 Agreement were both attempts to defraud creditors, including Mrs Young, within the meaning of s 37A of the Conveyancing Act 1919 (NSW). The court found that the parties' conduct indicated that any possible trust relationship under the 2001 Agreement was not intended or was abandoned, and that the agreement was a contrivance to defeat creditor claims. Therefore, the 2001 Agreement provided no defence to the impugned transfer, and the transfer was voidable as against the plaintiff.

Parties
Plaintiff: Joanne Elizabeth Young; Defendant: Josephine Aapa Smith
Jurisdiction
Australia
Judgment Date
10 April 2015
Procedural Posture
Civil / Principal Judgment After Final Hearing
Outcome
Plaintiff succeeds; relief in paragraphs 1 and 2 of the Summons granted; 2014 property transfer set aside as voidable; restraining orders to issue.
Legal Topics
Voidable Transactions, Transfer of Property, Trust Agreements, Creditor Fraud, Existence of Trust, Abandonment or Abrogation of Trust
Real Property Trusts Voidable Transactions Transfer of Property Trust Agreements Creditor Fraud Existence of Trust Abandonment or Abrogation of Trust

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Parties

Joanne Elizabeth Young

Plaintiff

Josephine Aapa Smith

Defendant

Procedural Posture

Civil / Principal Judgment After Final Hearing

Legal Issues

  1. 1 Whether the transfer of property to the defendant was made with intent to defraud creditors contrary to s 37A of the Conveyancing Act 1919 (NSW)
  2. 2 Whether a trust existed by virtue of the 2001 Agreement between Mr Young and Ms Smith
  3. 3 Whether the 2001 Agreement was abandoned or abrogated or intended to operate as a trust

Ratio Decidendi

The transfer of Mr Young's interest in the Property to Ms Smith on 7 August 2014 and the 2001 Agreement were both attempts to defraud creditors, including Mrs Young, within the meaning of s 37A of the Conveyancing Act 1919 (NSW). The court found that the parties' conduct indicated that any possible trust relationship under the 2001 Agreement was not intended or was abandoned, and that the agreement was a contrivance to defeat creditor claims. Therefore, the 2001 Agreement provided no defence to the impugned transfer, and the transfer was voidable as against the plaintiff.

Court Disposition

Plaintiff succeeds; relief in paragraphs 1 and 2 of the Summons granted; 2014 property transfer set aside as voidable; restraining orders to issue.

Orders

  • Transfer of Mr Young's interest in the Property to Ms Smith on 7 August 2014 is voided pursuant to s 37A of the Conveyancing Act 1919 (NSW).
  • Restraint on Ms Smith from mortgaging, charging, further encumbering, alienating, disposing of or otherwise dealing with the Property.