Cook v Benson [2003] HCA 36

Cook v Benson [2003] HCA 36

The majority held that payments by the bankrupt as contributions to superannuation schemes were made pursuant to commercial transactions. The trustees of the schemes undertook obligations to provide substantial rights and benefits to the bankrupt in return for the payments, constituting valuable consideration. Therefore, the recipients were purchasers for valuable consideration under s 120(1) of the Bankruptcy Act 1966 (Cth), and the settlements were not void against the trustee. Kirby J dissented, finding that the trustees were not purchasers nor provided valuable consideration for the disposition of money as such.

Parties
Appellant: Paul John Cook; First Respondent: Peter Robert Benson; Second Respondent: Legal & General Superannuation Services Pty Ltd; Third Respondent: Prudential Corporation Australia Ltd; Fourth Respondent: Mercantile Mutual Custodians Pty Ltd
Jurisdiction
Australia
Judgment Date
19 June 2003
Procedural Posture
Appeal / Final Judgment
Outcome
appeal dismissed with costs
Legal Topics
Avoidance of Settlements, Superannuation Entitlements, Valuable Consideration, Settlement of Property, Purchaser in Bankruptcy, Trustee Powers
Bankruptcy Law Avoidance of Settlements Superannuation Entitlements Valuable Consideration Settlement of Property Purchaser in Bankruptcy Trustee Powers

Case Brief

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Parties

Paul John Cook

Appellant

Peter Robert Benson

First Respondent

Legal & General Superannuation Services Pty Ltd

Second Respondent

Prudential Corporation Australia Ltd

Third Respondent

Mercantile Mutual Custodians Pty Ltd

Fourth Respondent

Procedural Posture

Appeal / Final Judgment

Legal Issues

  1. 1 Whether payments made as contributions to superannuation funds constituted settlements of property under s 120 of the Bankruptcy Act 1966 (Cth)
  2. 2 Whether recipients of contributions were purchasers for valuable consideration as required by s 120(1)
  3. 3 Whether the trustee could claw back payments under bankruptcy law

Ratio Decidendi

The majority held that payments by the bankrupt as contributions to superannuation schemes were made pursuant to commercial transactions. The trustees of the schemes undertook obligations to provide substantial rights and benefits to the bankrupt in return for the payments, constituting valuable consideration. Therefore, the recipients were purchasers for valuable consideration under s 120(1) of the Bankruptcy Act 1966 (Cth), and the settlements were not void against the trustee. Kirby J dissented, finding that the trustees were not purchasers nor provided valuable consideration for the disposition of money as such.

Court Disposition

appeal dismissed with costs

Orders

  • Appeal dismissed with costs