Victorian Producer's Co-Operative Co Ltd v Kenneth [1999] FCA 1488

Victorian Producer's Co-Operative Co Ltd v Kenneth [1999] FCA 1488

The transfer of property under the mortgage was void against the trustee pursuant to s 120(1)(b) of the Bankruptcy Act 1966 (Cth) because the value of consideration given (forbearance to sue and advances) was significantly less than the market value of the live stock transferred. The trustee must refund the value of the consideration given, assessed at $10,438.48.

Parties
Applicant: Victorian Producers' Co-Operative Company Limited; First Respondent: Philip Kenneth Aggs in his capacity as Trustee of the bankrupt estate of Robert William Heather and Martha Faye Heather; Second Respondent: George Lionel Caddy in his capacity as Official Receiver for the Bankruptcy District of the Australian Capital Territory
Jurisdiction
Australia
Judgment Date
29 October 1999
Procedural Posture
Application and Cross Claim / Final Judgment
Outcome
Application dismissed; declaration granted that transfer is void; payment order; costs order; liberty to apply reserved
Legal Topics
Void Transfer, Consideration, Mortgage of Livestock, Forbearance to Sue, Market Value of Property
Bankruptcy Void Transfer Consideration Mortgage of Livestock Forbearance to Sue Market Value of Property

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Parties

Victorian Producers' Co-Operative Company Limited

Applicant

Philip Kenneth Aggs in his capacity as Trustee of the bankrupt estate of Robert William Heather and Martha Faye Heather

First Respondent

George Lionel Caddy in his capacity as Official Receiver for the Bankruptcy District of the Australian Capital Territory

Second Respondent

Procedural Posture

Application and Cross Claim / Final Judgment

Legal Issues

  1. 1 Whether transfer of property under mortgage of live stock is void against the trustee under s 120 of the Bankruptcy Act 1966
  2. 2 Whether value of forbearance to recover indebtedness of debtors is less than the market value of the live stock transferred under the mortgage
  3. 3 Whether under s 120(4) the trustee must pay to the Co-operative a sum equal to the value of any consideration that the Co-operative gave for the transfer

Ratio Decidendi

The transfer of property under the mortgage was void against the trustee pursuant to s 120(1)(b) of the Bankruptcy Act 1966 (Cth) because the value of consideration given (forbearance to sue and advances) was significantly less than the market value of the live stock transferred. The trustee must refund the value of the consideration given, assessed at $10,438.48.

Court Disposition

Application dismissed; declaration granted that transfer is void; payment order; costs order; liberty to apply reserved

Orders

  • The Application dated 1 October 1998 be dismissed.
  • Declaration that the transfer of property made under the mortgage is void against the first respondent.