FEDERAL COURT OF AUSTRALIA Taylor (Trustee), in the matter of Kwok v Goldana Investments Pty Limited (receivers and managers appointed) [2015] FCA 517 Citation: Taylor (Trustee), in the matter of Kwok v Goldana Investments Pty Limited (receivers and managers appointed) [2015] FCA 517 Parties: BARRY ANTHONY TAYLOR AS TRUSTEE OF THE BANKRUPT ESTATE OF MICHAEL WILSON KWOK v GOLDANA INVESTMENTS PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 073 235 275) AND ANOR File number: NSD 316 of 2014 Judge: WIGNEY J Date of judgment: 13 April 2015 Catchwords: BANKRUPTCY AND INSOLVENCY – Whether a transfer of shares by a person who later becomes a bankrupt is void against the trustee pursuant to section 121 of the Bankruptcy Act 1966 (Cth) Legislation: Bankruptcy Act 1966 (Cth), s 121 Corporations Act 2001 (Cth), ss 9, 461(1)(k), 462(2) Family Law Act 1975 (Cth), s 90C Federal Court Rules 2011 (Cth), r 30.21 Cases cited: Re H L Bolton Engineering Co Ltd [1956] Ch 577 Re Jury; Ashton v Prentice (1999) 92 FCR 68 Date of hearing: 13 April 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 44 Counsel for the Applicant: Mr A Spencer Solicitor for the Applicant: Gadens Lawyers Counsel for the Respondents: The Respondents did not appear IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 316 of 2014 IN THE MATTER OF THE BANKRUPT ESTATE OF MICHAEL WILSON KWOK BETWEEN: BARRY ANTHONY TAYLOR AS TRUSTEE OF THE BANKRUPT ESTATE OF MICHAEL WILSON KWOK Applicant AND: GOLDANA INVESTMENTS PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 073 235 275) AND ANOR Respondents JUDGE: WIGNEY J DATE OF ORDER: 13 APRIL 2015 WHERE MADE: SYDNEY THE COURT DECLARES THAT: 1. The transfer on 3 November 2011 by the bankrupt, Michael Wilson Kwok, to the second respondent of 100 shares in the first respondent is void against the applicant, pursuant to section 121 of the Bankruptcy Act 1966 (Cth). THE COURT ORDERS THAT: 1. The second respondent transfer the 100 shares in the first respondent held by it to the bankrupt, Michael Wilson Kwok, on or before 11 May 2015. 2. In the event that the second respondent does not comply with Order 1, the Australian Securities and Investment Commission be directed on or before 8 June 2015 to alter the shareholder in Goldana Investments Pty Limited (receivers and managers appointed) ACN 073 235 275 to reflect Michael Wilson Kwok as the sole shareholder of all the 100 issued shares in Goldana Investments Pty Limited. 3. The matter be listed for further directions in relation to the balance of the proceedings at 9.30am on 12 June 2015. 4. The applicant's costs of this application be paid from the bankrupt estate of Michael Wilson Kwok. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 316 of 2014 IN THE MATTER OF THE BANKRUPT ESTATE OF MICHAEL WILSON KWOK BETWEEN: BARRY ANTHONY TAYLOR AS TRUSTEE OF THE BANKRUPT ESTATE OF MICHAEL WILSON KWOK Applicant AND: GOLDANA INVESTMENTS PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 073 235 275) AND ANOR Respondents JUDGE: WIGNEY J DATE: 13 APRIL 2015 PLACE: SYDNEY REASONS FOR JUDGMENT (Delivered ex tempore, revised from transcript) 1 The applicant in these proceedings is the trustee in bankruptcy of the bankrupt estate of Michael Wilson Kwok (the Trustee). Mr Kwok became bankrupt on 10 February 2012 after he failed to comply with a bankruptcy notice which required him to pay $13,583,412.13 to the Bank of Western Australia Limited (Bankwest) pursuant to a judgment Bankwest obtained against Mr Kwok in the Supreme Court of New South Wales. By failing to comply with the bankruptcy notice, Mr Kwok committed an act of bankruptcy on 9 June 2011. A creditor's petition was issued to Mr Kwok on 2 August 2011 (the Petition). 2 Following the issue of the petition, but prior to the hearing of the petition in the then Federal Magistrates Court of Australia, Mr Kwok transferred property to his former wife, Ms Tracy Helen James. Ms James is the second respondent in these proceedings. The property transferred to Ms James was 100 shares in a company named Goldana Investments Pty Limited, (Goldana). Goldana is the first respondent in these proceedings. The transferred shares comprised the entire issued share capital of Goldana. Prior to the transfer, which was made on 3 November 2011, Mr Kwok was the sole director of Goldana. Following the transfer, Ms James was appointed sole director. 3 The principal relief sought by the Trustee in these proceedings is a declaration that Mr Kwok's transfer of the 100 shares in Goldana to Ms James is void against the Trustee by reason of s 121 of the Bankruptcy Act 1966 (Cth) (the Act), and an order that Ms James transfer the shares to Mr Kwok. The Trustee alleges, in short, that but for the transfer, the shares would probably have become part of Mr Kwok's bankrupt estate, and that Mr Kwok's main purpose in making the transfer was to prevent the shares from becoming divisible among his creditors, or to hinder or delay that process. 4 For the reasons that follow, the Trustee has made good these allegations and he has made out his case under s 121 of the Act. Evidence and Facts 5 When the matter was called on for trial, there was no appearance by either Ms James or Goldana. That was not entirely unexpected. Whilst Ms James and Goldana were initially legally represented and had filed a defence and an affidavit purporting to support some of the facts pleaded in the defence, their lawyer subsequently filed a notice of ceasing to act. It appears that Ms James now resides in Hong Kong. It appears that no further lawyers were instructed to act for Ms James or Goldana. Ms James did not respond to a letter from the Trustee's lawyers that advised her that, as the deponent of the affidavit sworn in support of the filed defence, she was required to attend for cross-examination at the hearing. 6 In the circumstances, it was appropriate for the trial to proceed in the absence of Ms James and Goldana pursuant to r 30.21 of the Federal Court Rules 2011 (Cth). The Trustee read two affidavits in support of the application, being affidavits sworn by him on 25 March and 7 August 2014. Those affidavits exhibited a large number of documents. The affidavits and exhibited documents establish the following relevant facts. 7 On 18 December 2006, Bankwest loaned $32,150,000 to a company named Noble Growth Investment Limited (Noble Growth) to fund the purchase of a property at Leura in New South Wales. That property was the site of a then well-known resort known as the Fairmont Resort. Mr Kwok and Ms James were directors of Noble Growth at the time. 8 The Bankwest loan was guaranteed by, amongst others, Mr Kwok. 9 It would seem that Mr Kwok and Ms James were not cut out for resort management. Under the management of Mr Kwok and Ms James, or companies controlled by or associated with them, the Fairmont Resort lost its 4 or 4.5 star rating, and received poor reviews on websites that promoted and rated hotels and resorts. The Fairmont Resort was also removed from websites and booking services operated by Blue Mountains Tourism, Tourism New South Wales and Blue Mountains City Council and was the subject of, no doubt sensational, exposés on a well-known television current affairs program. The poor reviews and performance of the Fairmont Resort led, as one would expect, to sharply declining revenues. 10 This caused Bankwest to act under its loan facility agreement. On 27 May 2009, Bankwest wrote to Mr Kwok and Ms James as directors of Noble Growth. In the letter, Bankwest required Noble Growth to appoint a new professional manager to the resort and to immediately inject $6,000,000 into the resort to cover upgrades and to reduce debt. Bankwest pointed out that failure to comply with those requirements would cause it to issue a notice of default under the loan facility. Bankwest also advised that it proposed to commission a new valuation of the property and to reset the loan at a maximum loan to valuation ratio of 60 per cent. 11 The date of Bankwest's letter, that is, 27 May 2009, has some significance. One of the documentary exhibits to one of the Trustee's affidavits is a document titled "Financial Agreement". It purports to be a financial agreement between Mr Kwok and Ms James, then known as Helen Kwok, pursuant to s 90C of the Family Law Act 1975 (Cth) (Family Law Act). The document is dated 30 May 2009, three days after Bankwest's demands were communicated to Mr Kwok and Ms James. 12 It will be necessary to say something more about that document in due course. It is sufficient at this stage to make three points about it. First, the defence filed by Ms James and Goldana relies almost entirely on the agreement purportedly recorded in this document. Ms James and Goldana claim in their defence that, as a result of the 30 May 2009 financial agreement, the 100 shares in Goldana were beneficially owned by Ms James, not Mr Kwok. Second, there is no evidence, other than, perhaps, what can be inferred from the document itself, concerning the entry into the agreement or the circumstances in which it was entered into. Third, the terms of the purported agreement are, to say the very least, obscure. The operative provisions are in the following terms: (1) This agreement shall be binding upon the heirs, executors, administrators and assigns of each party. (2) The Husband and the Wife both agree that notwithstanding the actual contribution to the family, all the real estate properties currently under the name of the Husband or under the name of any company under the control of the Husband shall belong to the Wife only, the Husband shall still be liable to pay any mortgages over any real estate properties under his name or under his possession. (3) The Husband is entitled to keep any other properties except any real estate property/properties under his name or under his possession. (4) The Wife is entitled to keep any property/properties currently under her name or her possession. (5) The Husband and Wife shall separately retain all other properties, including but not limited to personal properties, shares, bank money, cars currently under their names or under their possessions. (6) The Husband and the Wife will ensure to separate their financial affairs from the date of this Agreement. 13 The husband and the wife referred to in the agreement are respectively Mr Kwok and Ms James. As can be seen, these provisions purport to deal with the ownership of "real estate properties" held in the name of Mr Kwok or companies under his control. Whatever these provisions may provide in that regard, and even that is unclear, they say nothing whatsoever about the legal or beneficial ownership of shares in companies. Indeed, paragraph 5 of the agreement appears to contemplate that Mr Kwok and Ms James would separately retain other property, including shares, currently held in their names. It is difficult to see how the agreement could possibly be construed as effecting a transfer of the legal or beneficial ownership of the Goldana shares to Ms James. 14 Returning to the facts concerning Bankwest, Noble Growth and the Fairmont Resort, it is not entirely clear from the evidence what, if anything, Noble Growth, Mr Kwok and Ms James did in respect of Bankwest's requirements concerning the injection of cash into the business. It is clear, however, that Bankwest went ahead and commissioned a new valuation. In November 2009, the Fairmont Resort was valued at $30,000,000. Given that the initial loan from Bankwest was for $32,150,000, it may readily be inferred that the debt to Bankwest exceeded the loan to valuation ratio determined by Bankwest pursuant to the loan facility agreement. It may also be inferred that Noble Growth in due course defaulted under the loan facility. 15 It is, however, unclear from the evidence exactly how and when the default occurred. The most that can be said is that on 11 December 2009, Einstein J, in the Supreme Court of New South Wales, appointed receivers to the business known as the York Fairmont Resort at Leura. The receivers were, however, given only limited powers. 16 It is equally unclear from the evidence exactly when Bankwest called on Noble Growth, and Mr Kwok as guarantor, to repay amounts due under the loan facility. All that can be said is that, at some stage, Bankwest filed a cross-claim against Noble Growth, Mr Kwok and another company in the Supreme Court proceedings and that judgment for Bankwest against Noble Growth, Mr Kwok and the other company for $13,583,412.13 was given on 16 March 2011. It can, perhaps, be inferred that the time between Bankwest's initial demands in mid-2009 and judgment in March 2011 was taken up by manoeuvrings in the litigation between the parties. 17 Whilst Mr Kwok was involved in the litigation concerning Bankwest and the Fairmont Resort during 2010, another problem flared up in relation to Goldana. Goldana's principal asset was an interest in the Greystanes Shopping Centre in New South Wales. Goldana had acquired that property in May 1997. The property was mortgaged to National Mutual Life Association Australasia Ltd (National Mutual) to secure borrowings by a third party of almost $10,000,000. By November 2006, the loan amount secured by the mortgage had grown to almost $20,000,000. It would appear that sometime in 2010 there was a default under the loan and mortgage. Receivers and managers of Goldana were appointed on 20 September 2010. 18 The Greystanes Shopping Centre was sold by the receivers in about June 2011 and the debt owing to National Mutual was paid out in full. For reasons that it is unnecessary to go into, the balance of the monies received by the receivers of Goldana upon the sale of the Greystanes Shopping Centre was paid into the Supreme Court of New South Wales on 17 February 2014. The Trustee has filed an appearance in the Supreme Court proceedings. That is presumably on the basis that, if the funds paid into court are the property of Goldana, and if the transfer of the Goldana shares from Mr Kwok to Ms James is declared to be void, the funds may ultimately be available for division amongst Mr Kwok's creditors. Is the transfer void under section 121 of the Act? 19 Section 121 of the Act relevantly provides as follows: 121 Transfers to defeat creditors Transfers that are void (1) A transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee) is void against the trustee in the transferor's bankruptcy if: (a) the property would probably have become part of the transferor's estate or would probably have been available to creditors if the property had not been transferred; and (b) the transferor's main purpose in making the transfer was: (i) to prevent the transferred property from becoming divisible among the transferor's creditors; or (ii) to hinder or delay the process of making property available for division among the transferor's creditors. Note: For the application of this section where consideration is given to a third party rather than the transferor, see section 121A. Showing the transferor's main purpose in making a transfer (2) The transferor's main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent. Other ways of showing the transferor's main purpose in making a transfer (3) Subsection (2) does not limit the ways of establishing the transferor's main purpose in making a transfer. Transfer not void if transferee acted in good faith (4) Despite subsection (1), a transfer of property is not void against the trustee if: (a) the consideration that the transferee gave for the transfer was at least as valuable as the market value of the property; and (b) the transferee did not know, and could not reasonably have inferred, that the transferor's main purpose in making the transfer was the purpose described in paragraph (1)(b); and (c) the transferee could not reasonably have inferred that, at the time of the transfer, the transferor was, or was about to become, insolvent. Rebuttable presumption of insolvency (4A) For the purposes of this section, a rebuttable presumption arises that the transferor was, or was about to become, insolvent at the time of the transfer if it is established that the transferor: (a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor's business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them. Refund of consideration (5) The trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee. What is not consideration (6) For the purposes of subsections (4) and (5), the following have no value as consideration: (a) the fact that the transferee is related to the transferor; (b) if the transferee is the spouse or de facto partner of the transferor—the transferee making a deed in favour of the transferor; (c) the transferee's promise to marry, or to become the de facto partner of, the transferor; (d) the transferee's love or affection for the transferor; (e) if the transferee is the spouse, or a former spouse, of the transferor—the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975; (f) if the transferee is a former de facto partner of the transferor—the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975. Exemption of transfers of property under debt agreements (7) This section does not apply to a transfer of property under a debt agreement. Protection of successors in title (8) This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property. Meaning of transfer of property and market value (9) For the purposes of this section: (a) transfer of property includes a payment of money; and (b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and (c) the market value of property transferred is its market value at the time of the transfer. 20 To make out his case that the transfer of the Goldana shares by Mr Kwok to Ms James is void under s 121 of the Act, the Trustee must establish the following matters. 21 First, the Trustee must establish that there has been a transfer of property by Mr Kwok, being a person who later became bankrupt, to Ms James. 22 There is no issue in relation to proof of this matter. There could be no doubt that the 100 shares in Goldana transferred by Mr Kwok to Ms James on 3 November 2011 was a transfer of property for the purposes of s 121 of the Act. 23 Second, it must be established that the property, being the 100 Goldana shares, would probably have become part of Mr Kwok's estate or would probably have been available to creditors if the transfer had not occurred. 24 In relation to this matter, given the proximity between the date of the transfer and the date that Mr Kwok became bankrupt, there could be little doubt that, but for the transfer, the shares would have become part of Mr Kwok's bankrupt estate or would have been available to his creditors. This second matter is accordingly made out on the evidence. 25 Third, the trustee must prove that Mr Kwok's main purpose in making the transfer was to prevent the shares becoming divisible amongst Mr Kwok's creditors, or to hinder or delay that process. By reason of s 121(2) of the Act, this element may be taken to be made out if it can reasonably be inferred from all the circumstances that, as at the date of the transfer, Mr Kwok was or was about to be insolvent. 26 In Re Jury; Ashton v Prentice (1999) 92 FCR 68 (Re Jury), the Full Court said the following concerning s 121(2) of the Act (at [55]): In our view the phrase in s 121(2), "if it can reasonably be inferred from all the circumstances that ... the transferor was ... insolvent", is not synonymous with "if the transferor was insolvent". The statutory provision, as a matter of ordinary language, leaves open the possibility that it may also reasonably be inferred that the transferor was solvent. In other words, it is sufficient if the inference of insolvency is reasonably open. An analogy is the leaving of a case to a civil jury. If it can reasonably be inferred from all the circumstances that the defendant was negligent, or that the publication complained of was defamatory of the plaintiff, then the matter must go to a jury. Nevertheless the jury is not required to draw the relevant inference, and may not do so. 27 There could be no doubt that it is reasonably open to infer that Mr Kwok was insolvent on 3 November 2011. Only months before that date, Mr Kwok had judgment entered against him for more than $13,000,000. A bankruptcy notice relying on that judgment was served on Mr Kwok on 19 May 2011. On 9 June 2011, Mr Kwok committed an act of bankruptcy by failing to comply with the bankruptcy notice. In August 2011, a creditor's petition was issued against Mr Kwok. 28 Against this, there is no evidence that Mr Kwok had sufficient assets to meet the judgment debt. It may be inferred that he did not. Indeed, that inference is supported by the very fact that Mr Kwok sought to transfer his shares in Goldana to Ms James in November 2011. 29 Given that it is reasonable to infer that at the date of the transfer Mr Kwok was, or was about to be, insolvent, the purpose element in s 121(1)(b) is made out. 30 Even without the deeming provision in s 121(2) of the Act, it can readily be inferred that Mr Kwok's purpose in effecting the transfer on 3 November 2011 was to prevent the shares from being divisible amongst his creditors, or to hinder or delay that process. Given the timing of the transfer and the absence of any evidence from Mr Kwok or anyone else concerning the purpose of the transfer, the inference is well-nigh inescapable. 31 The final matter to consider is the potential operation of s 121(4) of the Act. In Re Jury, the Full Court held (at [67]) that the burden of establishing the matters in s 121(4) is on the transferee. The transferee here is Ms James. Ms James has not appeared in opposition to the Trustee's application and has not led any evidence that she acted in good faith or that any of the matters in s 121(4) of the Act are made out. 32 Nor is there any other evidence of any of the matters in s 121(4). In relation to s 121(4)(a), there is no evidence that any consideration was paid for the shares, let alone that any consideration that might have been given by Ms James was at least as valuable as the market value of the shares. 33 In relation to s 121(4)(b), there is no evidence that Ms James did not know or could not reasonably have inferred that Mr Kwok's purpose in effecting the transfer was to prevent the shares from becoming divisible amongst his creditors. Indeed, if anything, it could be reasonably inferred, at the very least, that if she did not know that this was Mr Kwok's purpose, Ms James could readily have inferred it from all the circumstances. It may be inferred that Ms James knew about Mr Kwok's financial position and the timing of the transfer. That inference flows almost inescapably from the nature of her relationship with Mr Kwok and her involvement in his past business ventures, including in relation to the Fairmont Resort. 34 The same can be said concerning s 121(4)(c). Not only is there no evidence to support an inference that Ms James could not reasonably have inferred that, at the time of the transfer, Mr Kwok was about to become insolvent, the opposite inference is reasonably available. Given the nature of Ms James' relationship with Mr Kwok and his business affairs, it may reasonably be inferred that by November 2011, she well knew that he was or was about to become insolvent. 35 It follows that the Trustee has made out all of the requisite elements in respect of his case under s 121 of the Act in relation to the transfer of the Goldana shares. 36 While strictly unnecessary, it remains to say something briefly about the defence filed by Ms James and Goldana. As earlier indicated, the defence relies heavily on the so-called 30 May 2009 financial agreement. The contention in the defence is that on 3 November 2011, when the Goldana shares were transferred, there was no value in the legal title to the shares as Ms James was already the beneficial owner of the shares by reason of the 30 May 2009 financial agreement. It is also contended that Ms James gave market value consideration for the transfer. The consideration is said to be the giving up of rights in other property that Ms James supposedly had in the context of a settlement of property under an agreement pursuant to the Family Law Act. 37 There is no evidence to support any of the contentions in the defence. There is no evidence that the 100 Goldana shares or any of them were ever held on trust for Ms James, either as a result of any agreement entered into on 30 May 2009 or otherwise. As stated earlier, there is no evidence concerning the execution or entry into of the 30 May 2009 financial agreement. The terms of the document said to contain this agreement do not, in any event, support the contentions in the defence. The terms of the document say nothing about the legal and equitable ownership of any shares, let alone the shares in Goldana. To the extent that the document refers to shares, it suggests that the ownership of shares was not affected by the supposed agreement. There is nothing in the document relating to the transfer of legal or equitable ownership in shares, let alone the consideration for any such transfer. Other relief – SHOULD GOLDANA BE WOUND UP? 38 In the Trustee's amended application, he also seeks an order pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) (Corporations Act) that Goldana be wound up on a just and equitable basis. 39 A potential difficulty for the Trustee in relation to this relief is that it is doubtful that he has standing, at least at this stage, to apply for Goldana to be wound up on this ground. Section 462(2) of the Corporations Act specifies who may apply for an order to wind up a company. The list includes the company itself, a creditor of the company, a contributory, the liquidator of the company, the Australian Securities and Investments Commission or the Australian Prudential Regulation Authority. 40 The Trustee does not appear to be in the position of any of the persons or entities in that list. A contributory is defined in s 9 of the Corporations Act to mean, in the case of a company: contributory means: (a) in relation to a company (other than a no liability company): (i) a person liable as a member or past member to contribute to the property of the company if it is wound up; and (ii) for a company with share capital—a holder of fully paid shares in the company; and (iii) before the final determination of the persons who are contributories because of subparagraphs (i) and (ii)—a person alleged to be such a contributory; and (b) in relation to a Part 5.7 body: (i) a person who is a contributory by virtue of section 586; and (ii) before the final determination of the persons who are contributories by virtue of that section—a person alleged to be such a contributory; and (c) in relation to a no liability company—subject to subsection 254M(2), a member of the company. 41 The Trustee is not yet the holder of shares in Goldana. The effect of the declaration and order that will be made under s 121 of the Act is that the shares in Goldana will be transferred back to Mr Kwok. The shares will, therefore, in due course, become part of the bankrupt estate of Mr Kwok. That does not mean that the Trustee is now the holder of the shares in Goldana. He is therefore not a contributory and has no standing to apply for Goldana to be wound up. 42 This conclusion would appear to be supported by authority. In Re H L Bolton Engineering Co Ltd [1956] Ch 577, it was held that a trustee in bankruptcy of a shareholder in a company has no standing to wind up the company, at least until the trustee becomes registered as the holder of the shares. 43 Perhaps realising this potential difficulty, the Trustee has applied for this part of his application to be adjourned so he can either take steps to be registered as the holder of the Goldana shares or otherwise consider his position. That is a course that should be acceded to. Disposition 44 It follows from the above reasons that the Court will make a declaration in the terms sought by the Trustee. That declaration is that the transfer by the bankrupt, Mr Kwok, to the second respondent, Ms James, of the shares in the first respondent, Goldana, is void against the Trustee pursuant to s 121 of the Act. Ancillary orders will also be made to require Ms James to transfer the shares to Mr Kwok, and for the shareholders register of Goldana to be altered to reflect such a transfer. The Trustee is also entitled to an order that his costs be paid out of the estate. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wigney. Associate: Dated: 27 May 2015