Barton, Terence v Official Receivers [1984] FCA 368

Barton, Terence v Official Receivers [1984] FCA 368

The payment of $170,000 by the bankrupt to the appellant constituted a 'settlement of property' under s.120 of the Bankruptcy Act 1966, was not made for valuable consideration as the consideration provided was illusory or nominal in a commercial sense, and the trial judge's finding and order should be varied only to permit the Official Receiver to apply for the appropriate order for payment, but the appeal should otherwise be dismissed.

Parties
Appellant: Terence Barton; Respondent: The Official Receiver
Jurisdiction
Australia
Judgment Date
12 November 1984
Procedural Posture
Appeal / On Appeal From a Single Judge of the Federal Court of Australia
Outcome
Appeal dismissed (save for variation as to the order for payment)
Legal Topics
Avoidance of Antecedent Transactions, Settlement of Property, Valuable Consideration, Dispositions to Defraud Creditors
Bankruptcy Avoidance of Antecedent Transactions Settlement of Property Valuable Consideration Dispositions to Defraud Creditors

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Parties

Terence Barton

Appellant

The Official Receiver

Respondent

Procedural Posture

Appeal / On Appeal From a Single Judge of the Federal Court of Australia

Legal Issues

  1. 1 Whether the payment of $170,000 from Thomas Barton (the bankrupt) to Terence Barton was a 'settlement of property' within the meaning of s.120 of the Bankruptcy Act 1966
  2. 2 Whether the payment was made 'for valuable consideration' under s.120(1)(a) of the Act
  3. 3 Whether the transaction constituted a 'disposition of property' under s.121 of the Act, and if so, whether it was with intent to defraud creditors

Ratio Decidendi

The payment of $170,000 by the bankrupt to the appellant constituted a 'settlement of property' under s.120 of the Bankruptcy Act 1966, was not made for valuable consideration as the consideration provided was illusory or nominal in a commercial sense, and the trial judge's finding and order should be varied only to permit the Official Receiver to apply for the appropriate order for payment, but the appeal should otherwise be dismissed.

Court Disposition

Appeal dismissed (save for variation as to the order for payment)

Orders

  • The order requiring the appellant to pay the Official Receiver $170,000 be varied by reserving leave to the Official Receiver to apply to the trial judge for orders as to the sum and timing of payment.
  • Otherwise, the appeal is dismissed.