Marcolongo v Chen [2011] HCA 3

Marcolongo v Chen [2011] HCA 3

The transfer of land by Lym International Pty Ltd to Mr Chen was made with intent to defraud creditors, specifically to delay or hinder Mrs Marcolongo's enforcement of her legal remedies for damages. The liberal construction of s 37A, in accordance with the legislative history and case law, permits intent to defraud to be inferred from circumstances where voluntary transfer prejudices a creditor. The findings and admissions established the requisite intent, and Mr Chen was not a purchaser in good faith without notice. The orders of the NSW Court of Appeal should be set aside and the decision of the primary judge restored.

Parties
Appellant: Leonilda Marcolongo; First Respondent: Yu Po Chen; Second Respondent: Lym International Pty Ltd
Jurisdiction
Australia
Judgment Date
09 March 2011
Procedural Posture
Appeal / Final Judgment by High Court of Australia
Outcome
Appeal allowed
Legal Topics
Conveyancing, Fraudulent Conveyances, Intent to Defraud Creditors, Voluntary Alienation, Registered Transfer of Land, Conveyancing Act 1919 (nsw) S 37 a
Real Property Equity Civil Procedure Conveyancing Fraudulent Conveyances Intent to Defraud Creditors Voluntary Alienation Registered Transfer of Land +1 more

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Parties

Leonilda Marcolongo

Appellant

Yu Po Chen

First Respondent

Lym International Pty Ltd

Second Respondent

Procedural Posture

Appeal / Final Judgment by High Court of Australia

Legal Issues

  1. 1 Whether s 37A of the Conveyancing Act 1919 (NSW) is satisfied only by actual or predominantly fraudulent intent, or can be inferred from conduct
  2. 2 Whether intent to defraud creditors includes delay or hindrance, and if intent may be inferred where transfer is voluntary
  3. 3 Whether Mr Chen was a purchaser in good faith without notice under s 37A(3)

Ratio Decidendi

The transfer of land by Lym International Pty Ltd to Mr Chen was made with intent to defraud creditors, specifically to delay or hinder Mrs Marcolongo's enforcement of her legal remedies for damages. The liberal construction of s 37A, in accordance with the legislative history and case law, permits intent to defraud to be inferred from circumstances where voluntary transfer prejudices a creditor. The findings and admissions established the requisite intent, and Mr Chen was not a purchaser in good faith without notice. The orders of the NSW Court of Appeal should be set aside and the decision of the primary judge restored.

Court Disposition

Appeal allowed

Orders

  • Appeal allowed.
  • Dismiss the summons filed by the second respondent seeking to file a notice of contention out of time.