Donnelly v Wallace [2000] FCA 1936

FEDERAL COURT OF AUSTRALIA

Donnelly v Wallace [2000] FCA 1936

BANKRUPTCY – application to transfer proceedings pursuant to s 120 of the Bankruptcy Act 1966 (Cth) to the Family Court – applicant has proceedings in the Family Court – Family Court has broad discretion to deal with all issues to finality – convenience of all parties and minimisation of costs. MAX CHRISTOPHER DONNELLY (AS TRUSTEE FOR GD WALLACE) v GRAEME DAVID WALLACE & ANOR N 7197 of 2000 MADGWICK J 5 DECEMBER 2000 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 7197 of 2000

BETWEEN: MAX CHRISTOPHER DONNELLY (as trustee for GD WALLACE)

APPLICANT

AND: GRAEME DAVID WALLACE

FIRST RESPONDENT

MARIAN MAUDE EMILY WALLACE

SECOND RESPONDENT

JUDGE: MADGWICK J

DATE OF ORDER: 5 DECEMBER 2000

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The s 120 application before the Court be transferred to the Family Court. 2. The respondents are to pay the difference between the costs of this application proceeding on an undefended basis and (as in substance it has done) on a defended basis, as agreed or taxed by the Registrar.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 7197 of 2000

BETWEEN: MAX CHRISTOPHER DONNELLY (as trustee for GD WALLACE)

APPLICANT

AND: GRAEME DAVID WALLACE

FIRST RESPONDENT

MARIAN MAUDE EMILY WALLACE

SECOND RESPONDENT

JUDGE: MADGWICK J

DATE: 5 DECEMBER 2000

PLACE: SYDNEY

REASONS FOR JUDGMENT (revised from transcript) HIS HONOUR: 1 In this case the substantive application before the Court is an application to declare void pursuant to s 120 of the Bankruptcy Act 1966 (Cth) ("the Act") a transfer by the first respondent of certain real property, being a house enjoyed as a matrimonial home by the first respondent and his wife, the second respondent. 2 The first respondent was made bankrupt in 1997 but has since achieved a discharge from that status. The transfer occurred in 1993. The contention of the applicant trustee of the estate is that the transfer was made at a time when the first respondent was insolvent and within the period of five years preceding the commencement of the bankruptcy, those being the then conditions of the Act for voiding the transfer. 3 The applicant has also instituted proceedings in the Family Court pursuant to s 79A of the Family Law Act 1975 (Cth) ("the FL Act") which permits that court, in its discretion, to vary an order made under s 79 if, among other things, there has been a miscarriage of justice by reason of fraud, suppression of evidence or any other circumstances. The transfer was actually made pursuant to consent orders obtained by the respondents from the Family Court pursuant to s 79 of the FL Act. 4 The decisive consideration, it seems to me, is that pursuant to s 79A of the FL Act, the Family Court has a broad discretion which would, among other things, allow matrimonial justice, as it were, and justice to the then creditors of the first respondent, to be determined at the same time. By contrast, if separate proceedings are kept on foot in this Court and, as the respondents wish, the Family Court performs a s 79A task before consideration by this Court of the application under s 120 of the Act, there can be no such certainty. 5 In these circumstances the trustee asks that the s 120 proceedings be transferred to the Family Court pursuant to s 35A of the Act. No doubt, where a proceeding is pending in this Court and the proceeding appears within the jurisdiction of the Court, the Court should not transfer it to another court, unless there is positive reason to do so. In my opinion, such a positive reason is shown, namely the ultimate likely convenience of all the parties and minimisation of costs.