Meletsis v Yeo in his capacity as trustee of the bankrupt estate of Karas [2023] FCAFC 93

FEDERAL COURT OF AUSTRALIA

Meletsis v Yeo in his capacity as trustee of the bankrupt estate of Karas [2023] FCAFC 93 Appealed from: Rambaldi (Trustee) v Meletsis, in the matter of the Bankrupt Estate of Karas [2022] FCA 73

File number(s): VID 226 of 2022

Judgment of: WIGNEY, ANDERSON AND ABRAHAM JJ

Date of judgment: 16 June 2023

Catchwords: TRUSTS AND TRUSTEES – corporate trustee in liquidation – where liquidator assigned company's causes of action against appellants to respondents – whether assigning right, title and interest in causes of action to respondents is limited to the company's right of indemnity against trust property and concomitant equitable lien – whether beneficiaries' interests in claims against appellants were engrafted onto assigned claim – where assigned causes of action are causes of action of the company which it could advance in its own right but for the deed of assignment – where on the proper construction of deed of assignment the liquidator assigned to respondents entirety of company's causes of action against the appellants. BANKRUPTCY AND INSOLVENCY – where corporate trustee sold property to new company at undervalue – where brother-in-law of director of corporate trustee had substantial personal tax liabilities and also held a mortgage over property – where primary judge found that brother-in-law of director of corporate trustee had an interest in property – where primary judge found that sale of property was pursuant to dishonest and fraudulent design to avoid claims of creditors of the company and brother-in-law – principles of appellate review of factual findings by primary judge – where primary judge's findings were open to be made and demonstrate no error. MORTGAGES – where discharge of mortgage for nil consideration is an alienation of property with intent to defraud creditors and void pursuant to s 172 of the Property Law Act 1958 (Vic) – where tracing remedy available against second appellant, as the ultimate recipient of the value of the discharged mortgage. EVIDENCE – admission into evidence of transcripts of examinations under s 81 of the Bankruptcy Act 1966 (Cth) – where appellants accepted that respondents were entitled to rely on transcripts for the purposes of proceedings under the Bankruptcy Act 1966 (Cth), but not proceedings brought under general law – where judge correct to disallow partial objection to tender of the transcripts.