Otto, Re B.V., (Debtor) Otto, Ex parte R.D. & E, (Applicant) Taylor, A.R., a debtor (Respondent) [1988] FCA 305

Otto, Re B.V., (Debtor) Otto, Ex parte R.D. & E, (Applicant) Taylor, A.R., a debtor (Respondent) [1988] FCA 305

The deed was entered into in good faith and for valuable consideration, namely the forbearance to enforce repayment of the $70,000 loan plus interest until proceeds from the business sale became available; therefore, the transaction is not void against the trustee.

Parties
Applicant: Rodney Douglas Otto; Applicant: Eileen Otto; Respondent: Alan Richard Taylor; Debtor: Brian Victor Otto; Debtor: Gwendoline Otto
Jurisdiction
Australia
Judgment Date
15 June 1988
Procedural Posture
Application / Extempore Judgment
Outcome
application granted
Legal Topics
Validity of Deed of Assignment, Good Faith in Bankruptcy, Valuable Consideration
Bankruptcy Validity of Deed of Assignment Good Faith in Bankruptcy Valuable Consideration

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Parties

Rodney Douglas Otto

Applicant

Eileen Otto

Applicant

Alan Richard Taylor

Respondent

Brian Victor Otto

Debtor

Gwendoline Otto

Debtor

Procedural Posture

Application / Extempore Judgment

Legal Issues

  1. 1 whether the deed dated 1 July 1986 giving security to Rodney Douglas Otto and Eileen Otto is void as against the trustee
  2. 2 whether the entry into the deed was in good faith and for valuable consideration

Ratio Decidendi

The deed was entered into in good faith and for valuable consideration, namely the forbearance to enforce repayment of the $70,000 loan plus interest until proceeds from the business sale became available; therefore, the transaction is not void against the trustee.

Court Disposition

application granted

Orders

  • Declaration that the transaction by which the debtors assigned the monthly sums, or the right to receive or enforce payment of those sums, to the applicants is not void against the trustee.
  • Applicants awarded costs of the application, to be taxed if not agreed, limited to today.