Re Castellucci, Domenico Ex parte Pipkin, Kevin Michael & Ors [1983] FCA 38

Re Castellucci, Domenico Ex parte Pipkin, Kevin Michael & Ors [1983] FCA 38

As the respondents acted in good faith, without knowledge or reason to suspect the bankrupt's insolvency or preferential effect, and the mortgage was given for valuable consideration in the ordinary course of business, the protective provisions of s.122(2) apply and the mortgage is not void.

Parties
Bankrupt: Domenico Castellucci; Applicant (trustee): Kevin Michael Pipkin; Respondent: Michele Gamma; Respondent: Rosa Gamma
Jurisdiction
Australia
Judgment Date
11 March 1983
Procedural Posture
Bankruptcy Application / Final Judgment
Outcome
Application dismissed
Legal Topics
Avoidance of Preference, Good Faith, Objective Determination of Suspicion, Secured Transactions
Bankruptcy Avoidance of Preference Good Faith Objective Determination of Suspicion Secured Transactions

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Parties

Domenico Castellucci

Bankrupt

Kevin Michael Pipkin

Applicant (trustee)

Michele Gamma

Respondent

Rosa Gamma

Respondent

Procedural Posture

Bankruptcy Application / Final Judgment

Legal Issues

  1. 1 Whether the mortgage executed by the bankrupt in favour of respondents is void as against the trustee under s.122 of the Bankruptcy Act 1966
  2. 2 Whether the respondents acted in good faith and in the ordinary course of business so as to fall within the protection of s.122(2)
  3. 3 Whether the respondents had knowledge or reason to suspect insolvency and the giving of preference

Ratio Decidendi

As the respondents acted in good faith, without knowledge or reason to suspect the bankrupt's insolvency or preferential effect, and the mortgage was given for valuable consideration in the ordinary course of business, the protective provisions of s.122(2) apply and the mortgage is not void.

Court Disposition

Application dismissed

Orders

  • The mortgage is not void against the applicant.
  • The applicant pay the respondents their costs to be taxed if not agreed.