Wily, Hugh Jenner v Warren, Susan [1997] FCA 574

Wily, Hugh Jenner v Warren, Susan [1997] FCA 574

The respondent failed to prove the elements required for protection under s 123. She was probably aware of the creditor's petition by 29 June or early July 1993, the $4,000 payment for the bankrupt's legal fees was unusual and not shown to be in good faith or in the ordinary course of business, and the $8,803 payments occurred after bankruptcy and were not shown to be made pursuant to any rent or maintenance arrangement, in good faith, or in the ordinary course of business. The transactions were therefore void.

Jurisdiction
Australia
Judgment Date
30 June 1997
Procedural Posture
Bankruptcy Application for Declarations That Payments by the Bankrupt to the Respondent Are Void / Reasons for Judgment and Orders After Hearing
Outcome
Application granted.
Legal Topics
['void Payments by Bankrupt' 'relation Back' "notice of Creditor's Petition" 'good Faith and Ordinary Course of Business' 'bankruptcy Act 1966 (cth) S 123']
['bankruptcy'] ['void Payments by Bankrupt' 'relation Back' "notice of Creditor's Petition" 'good Faith and Ordinary Course of Business' 'bankruptcy Act 1966 (cth) S 123']

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Procedural Posture

Bankruptcy Application for Declarations That Payments by the Bankrupt to the Respondent Are Void / Reasons for Judgment and Orders After Hearing

Legal Issues

  1. 1 ["Whether the respondent had notice of the presentation of a creditor's petition against the bankrupt at the time of the transactions." 'Whether the challenged payments were made in good faith and in the ordinary course of business for the purposes of s 123 of the Bankruptcy Act 1966 (Cth).' 'Whether payments of $4,000 and $8,803 by the bankrupt to or for the benefit of the respondent were void.']

Ratio Decidendi

The respondent failed to prove the elements required for protection under s 123. She was probably aware of the creditor's petition by 29 June or early July 1993, the $4,000 payment for the bankrupt's legal fees was unusual and not shown to be in good faith or in the ordinary course of business, and the $8,803 payments occurred after bankruptcy and were not shown to be made pursuant to any rent or maintenance arrangement, in good faith, or in the ordinary course of business. The transactions were therefore void.

Court Disposition

Application granted.

Orders

  • ['Declare that the payment of the sum of $4,000 by the bankrupt to the respondent in the first two weeks of August 1993 is void pursuant to the provisions of the Bankruptcy Act 1996.' 'Declare that the payments of the sums of money amounting to $8,803 by the bankrupt to the respondent in or about July 1994, with...