B v U [2012] NSWSC 1416

B v U [2012] NSWSC 1416

The first defendant's transfer of his half interest in the Concord property to the second defendant was an alienation made with intent to defraud creditors, including the plaintiff as a future creditor with an impending liability, and the second defendant had notice of that intention; her s 37A(3) defence was not established. The third defendant, however, was found to be a purchaser in good faith who did not have notice of the first defendant's intent to defraud creditors, so the plaintiff's claim against her failed.

Jurisdiction
Australia
Judgment Date
23 November 2012
Procedural Posture
Equity Division Proceedings Seeking Avoidance of Alienations of Property Under S 37 a of the Conveyancing Act 1919 / Principal Judgment After Hearing
Outcome
Plaintiff succeeded against the second defendant and failed against the third defendant; operation of the order avoiding the transfer to the second defendant was suspended for 90 days.
Legal Topics
['avoidance of Alienation of Property' 'intent to Defraud Creditors' 'future Creditors and Impending Liabilities' 'purchaser in Good Faith Without Notice' 'onus of Proof Under S 37 A(3)']
['real Property' 'equity' 'conveyancing' "creditors' Remedies"] ['avoidance of Alienation of Property' 'intent to Defraud Creditors' 'future Creditors and Impending Liabilities' 'purchaser in Good Faith Without Notice' 'onus of Proof Under S 37 A(3)']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Equity Division Proceedings Seeking Avoidance of Alienations of Property Under S 37 a of the Conveyancing Act 1919 / Principal Judgment After Hearing

Legal Issues

  1. 1 ["Whether the transfer of the first defendant's half interest in the Concord property to the second defendant should be avoided under s 37A(1) of the Conveyancing Act 1919." 'Whether the entitlement of the third defendant to the net proceeds of sale of the Gerroa property should be avoided under s 37A(1) of the Conveyancing Act 1919.' "Whether the second defendant or the third defendant was a purchaser in good faith without notice of the first defendant's intent to defraud creditors under s 37A(3)." 'Whether the plaintiff was a creditor for the purposes of s 37A where her judgment was obtained after the impugned transactions but there was an impending liability.']

Ratio Decidendi

The first defendant's transfer of his half interest in the Concord property to the second defendant was an alienation made with intent to defraud creditors, including the plaintiff as a future creditor with an impending liability, and the second defendant had notice of that intention; her s 37A(3) defence was not established. The third defendant, however, was found to be a purchaser in good faith who did not have notice of the first defendant's intent to defraud creditors, so the plaintiff's claim against her failed.

Court Disposition

Plaintiff succeeded against the second defendant and failed against the third defendant; operation of the order avoiding the transfer to the second defendant was suspended for 90 days.

Orders

  • ["Order pursuant to s 37A(1) avoiding the transfer of the first defendant's half interest in the Concord property to the second defendant, with operation suspended for 90 days." "Plaintiff's claim against the third defendant dismissed." "Plaintiff to pay the third defendant's costs." "Second defendant to pay the...