FEDERAL COURT OF AUSTRALIA Lane v Oakley [2019] FCA 107 File number: QUD 325 of 2017 Judge: RANGIAH J Date of judgment: 14 February 2019 Catchwords: BANKRUPTCY AND INSOLVENCY – ss 120 and 121 of the Bankruptcy Act 1966 (Cth) – whether registered and equitable mortgages are undervalued transactions – whether transactions made for the purpose of defeating creditors – whether consideration given for mortgages Legislation: Bankruptcy Act 1966 (Cth) ss 3, 5, 5(2), 6, 58, 116, 120, 120(1), 120(3), 121, 121(1), 121(2), 121(4)(b) and 121(4)(c) Corporations Act 2001 (Cth) Cases cited: Commercial Union Assurance Co of Australasia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Frost v Sheahan [2012] FCAFC 46 Gomez v Carrafa (Trustee) [2018] FCA 201 Jones v Dunkel (1959) 101 CLR 298 Lo Pilato (Trustee) v Kamy Saeedi Lawyers Pty Ltd (2017) 249 FCR 69 Marchesi v Apostolou [2007] FCA 986 Official Trustee in Bankruptcy v Lopatinsky (2003) 129 FCR 234 Official Trustee in Bankruptcy v Mateo (2003) 127 FCR 217 Official Trustee v Pastro [1999] FCA 1631 Pastro v Official Trustee in Bankruptcy [2000] FCA 744 Re Jury; Ashton v Prentice (1999) 92 FCR 68 Sandell v Porter (1966) 115 CLR 666 Date of hearing: 18 and 19 June 2018 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 154 Counsel for the Applicant: Mr SM Gerber Solicitor for the Applicant: Griffiths Parry Counsel for the Respondent: The Respondent appeared in person QUD 325 of 2017 IN THE MATTER OF THE BANKRUPT ESTATE OF ANN VIVIEN OAKLEY BETWEEN: MORGAN GERARD JAMES LANE AND PAUL ERIC NOGUEIRA AS TRUSTEES IN BANKRUPTCY OF THE BANKRUPT ESTATE OF ANN VIVIEN OAKLEY Applicant AND: TANIA MICHELE OAKLEY AS TRUSTEE FOR THE OAKLEY TRUST Respondent REASONS FOR JUDGMENT RANGIAH J: 1 The applicants are the trustees in bankruptcy of the estate of Ann Vivien Oakley. The property formerly owned by the bankrupt and now vested in the applicants includes a residential property at 8 Capri Court, Noosa Heads, Queensland (the Property). The Property is subject to a registered mortgage and an equitable mortgage in favour of the respondent. The respondent is the bankrupt's daughter. 2 The applicants allege that the mortgages are undervalued transactions under s 120 of the Bankruptcy Act 1966 (Cth) (the Act) and transactions made for the purpose of defeating creditors under s 121 of the Act. They seek, inter alia, declarations that the mortgages do not secure any debt and are void transfers of property. 3 The respondent denies the applicants' allegations and contends that the mortgages secure debts genuinely owed to the respondent and that full consideration was provided for the mortgages. 4 The proceeding requires examination of payments of money and other transactions made over a period of some eight years. It is necessary to describe the chronology and circumstances of the transactions and the entities involved in them in some detail. The persons and entities involved in the transactions 5 There are four members of the Oakley family. Tania Michele Oakley is the respondent. She is a daughter of the bankrupt, Ann Vivien Oakley, and Ronald Leigh Oakley. Tania is the sister of Meagan Oakley. As a matter of convenience, I will refer to the members of the Oakley family by their first names. 6 From 1990, Ann and Ronald operated a business called "Noosa Crayfish Farms" in partnership. The partnership is described in various bank statements as "RL & AV Oakley". In about 2008, the business structure was altered, such that Leeann Pty Ltd was incorporated and became the trustee of the Noosa Fish Farm Trust. Ann and Ronald were the directors and shareholders of Leeann Pty Ltd. 7 On 12 August 2002, The Oakley Trust was settled. Tania was appointed as trustee. The beneficiaries are, relevantly, Tania, Ann, Ronald and Meagan. Under cl 4(1) of the trust deed, the trustee has a discretion to apply the income of the trust fund to or for the benefit of the beneficiaries. 8 Tania was a director of and shareholder in Fintel Financial Intelligence Pty Ltd (Fintel) and a director of Tanoak Pty Ltd (Tanoak). Those companies were entities through which Tania conducted an education business and a financial services business respectively. They have now been deregistered. 9 Patrea Pradella was Ann's friend. She lent Ann large sums of money, which Ann failed to repay. That debt later led to Ann's bankruptcy. 10 The substance of Tania's defence is that The Oakley Trust lent amounts totalling $452,418 to Ann. Tania alleges that those amounts were paid to the RL & AV Oakley partnership, Leeann Pty Ltd, Meagan and Ms Pradella at Ann's request. Tania's case is that those debts are secured under the registered mortgage and the equitable mortgage granted by Ann over the Property. The evidence 11 The applicants rely upon an affidavit of the second-named applicant, Paul Eric Nogueira, which annexes a number of relevant documents. Tania did not object to its admission and, in fact, also relies upon the affidavit. Mr Nogueira was required for cross-examination. 12 In her defence, Tania admitted a number of facts alleged in the statement of claim. She filed her own affidavit. She was cross-examined. Her credit is very much in issue. 13 After Tania had given evidence, the applicants objected to the admissibility of some parts of her affidavit. After I suggested that the objections had been taken too late, they were withdrawn. 14 Tania relied upon the affidavit of Anthony Paul George. He has passed away since giving the affidavit. His affidavit was admitted into evidence without objection. 15 Ronald gave evidence and was cross-examined. Neither Ann, nor Meagan, gave evidence. Tania's convictions 16 On 3 September 2012, Tania was convicted in the District Court of Queensland of three offences against the Corporations Act 2001 (Cth), having previously entered pleas of guilty. The offences involved: (1) carrying on a financial services business without holding an Australian financial services licence; (2) directly or indirectly gaining an advantage for herself; (3) engaging in dishonest conduct in relation to a financial product or financial service while carrying on a financial services business. 17 The offences took place between 2007 and 2009. The first offence involved Tania carrying on a financial services business without a licence through Tanoak. The second offence was that Tania gained a financial advantage for herself by using approximately $766,900 from funds that investors had provided to Tanoak to purchase a house (it appears that those funds were at least substantially repaid). The third offence involved issuing false statements to about ten investors to cover-up losses that she had made from investing their funds. Tania was sentenced to three concurrent terms of imprisonment, the longest of which was for two years. 18 The offences are relevant both to the credibility of Tania's evidence and to why, on the applicants' case, Ms Pradella made the loans to Ann. The Pradella loans 19 Ms Pradella lent $300,000 to Ann on 6 February 2010, a further $230,000 on 8 March 2010 and $50,000 on 11 June 2013, totalling $580,000. 20 Some interest was repaid, but Ann did not repay any of the principal loan. Ms Pradella commenced proceedings against Ann in the District Court of Queensland and then applied for summary judgment. The summary judgment application was part heard on 23 September 2016, but was adjourned to allow Ann time to file further material. 21 The resumed hearing was set down for 30 September 2016, but Ann did not appear. The Court awarded summary judgment against her, ordering that she pay Ms Pradella the sum of $668,000 plus costs on an indemnity basis. 22 On 5 October 2016, Ann lodged a Debtor's Petition and became bankrupt. 23 In an affidavit sworn by Ann on 28 September 2016 in the District Court proceedings, she deposed that the circumstances leading to the loans were as follows: On or about the 3rd of February 2010, I was at Noosa Heads Beach with [Ms Pradella]. I told [Ms Pradella] about the severe financial situation that my family was facing trying to help my daughter. [Ms Pradella] said she had an $880,000 line of credit and that she would lend me money to help but it had to be paid back with interest. 24 When sentencing Tania, the sentencing judge said: In 2009 you were making big losses but dishonestly informing investors in the 39 account summaries, the subject of Count 2, that the investments were still intact and profitable. 25 At least one of the investors, Mrs Drysdale, was persistent in trying to get back the money she had lost, and, in March 2010, Ann repaid her $196,000 from the funds borrowed from Ms Pradella. 26 Having regard to these matters, I infer that when Ann referred to the severe financial situation that her family was facing "trying to help my daughter", the daughter she was referring to was Tania. The Registered Mortgage 27 Ann granted a mortgage over the Property in favour of Tania as trustee of The Oakley Trust on 29 September 2016. The mortgage (the Registered Mortgage) was registered on the same day. That was one day before Ms Pradella obtained judgment against Ann in the District Court. 28 Clause 2 of the Registered Mortgage document states that: 2.1 The Mortgagor acknowledges that the Mortgagee has advanced the sum of $151,000.00 to the mortgagor pursuant to the Loan Agreement. … 2.3 The Mortgagor mortgages to the Mortgagee all the Mortgagor's right, title and interest in, to, under and derived from the Mortgaged Property to secure the due and punctual payment of the Secured Money and the performance of the Mortgagor's obligations under this Mortgage. 29 Clause 3.1 provides: The Mortgagor must pay the secured money at the time, in the place and in the manner specified for payment in the Loan Agreement, or if no time is specified on demand. 30 The expression "Secured Money" is defined in cl 1.1 to mean, relevantly: Money secured by or payable under the Loan Agreement by the Mortgagor to or at the direction of the Mortgagee. 31 Clause 1.1 defines "Loan Agreement" as: The agreement between the Mortgagor and the Mortgagee dated on or about the date of this Mortgage. 32 Clause 1.2 provides: The Loan Agreement will be deemed to be incorporated into and form part of this Mortgage as if it was set out in this Mortgage in full. 33 In her oral evidence, Tania accepted that there is no separate document in existence called a "Loan Agreement". She claims, as I understand it, that the Loan Agreement was incorporated into and was part of the Registered Mortgage by the operation of cl 1.2. She also claims that the $151,000 had been paid as part of the money advanced and secured under a deed of charge and an equitable mortgage (which will be discussed in detail below). The Proof of Debt 34 On 15 November 2016, Tania, as trustee for The Oakley Trust, lodged a Proof of Debt in the bankruptcy. The debt is said to comprise of advances to Ann of $452,418 made between 11 January 2007 and 10 June 2011 and interest of $307,028.31. There are deductions of $57,000 allowed for repayments made by Ann. The total debt claimed is $702,446.31. 35 The Proof of Debt was accompanied by a summary of the advances or loans (the Summary) said to have been made at Ann's request. The Summary shows that 60 advances were made between 11 January 2007 and 10 June 2011. It was also accompanied by a handwritten "running total" of advances. 36 Various bank account statements in the name of The Oakley Trust, RL & AV Oakley, Fintel, Leeann Pty Ltd and Ann Vivian Oakley were also lodged with the Proof of Debt. The applicants do not dispute that these bank statements show that The Oakley Family Trust made the payments set out in the Summary accompanying the Proof of Debt. 37 The Proof of Debt was also accompanied by a Deed of Charge dated 29 June 2008 and a Mortgage Agreement dated 1 December 2015 that are said to secure the advances. The Deed of Charge 38 The Deed of Charge is dated 29 June 2008 and is between Tania (described as the "chargee" or "lender") and Ann (described as the "chargor" or "borrower"). 39 Clause 3 of the Deed of Charge provides: Charge 3.(1) The chargor, as owner, charges her estate and all its property, assets and rights both present and future including any future inheritance or purchase of property (the 'charged property') with payment or repayment to The Oakley Trust of the secured moneys as follows: (a) by way of floating charge all: i. interests in any real and leasehold property ii. vehicles iii. any interest or equity in a business iv. securities, shares, bonds, options and warrants that are not specifically stated in Schedule 1; and (b) by way of a fixed charge all the charged property specified in Schedule 1. 40 Clause 2(1) of the Deed of Charge defines "secured moneys" to mean, relevantly: (a) all moneys now or later due or payable actually or contingently by the charger whether alone or jointly with any other person to the chargee by reason or of arising under or in connection with any financial accommodation now or from time to time later made or extended by the chargee to or otherwise due or payable to the chargee by the chargor whether alone or jointly with any other person on any account; (b) all moneys which the chargee is now or later becomes liable to pay to for or for the accommodation of or on behalf of the chargor whether alone or jointly with any other person by reason of the chargee making any loans or advances or otherwise incurring liabilities for or for the accommodation of or on behalf of or at the request (whether express or implied) of the chargor whether alone or jointly with any other person; (c) all moneys now or later paid applied expended or disbursed by the chargee or which the chargee is now or later becomes liable to pay apply expend of disburse by way of loans advances credit facilities or other financial accommodation to for or for the accommodation of or on behalf of any other person company trust or other entity on the order or at the request (whether express or implied) or under the authority of the chargor whether acting alone or jointly with any other person; (d) All moneys paid to any person or entity by the chargee at the request of the chargor on behalf of the chargor for use by any other person or entity whether jointly or alone or for use by the chargor whether alone or Jointly with any other person or entity. (e) all moneys which the chargee is now or later becomes entitled to debit and charge to any account of the chargor whether alone or jointly with any other person whether under this deed of charge or any other security or instrument now or later held by the chargee from or relating to the chargor whether alone or jointly with any other person. (f) all interest due or payable by or debited to the account of the chargor on all or any of those moneys in accordance with any instrument between the chargor and the chargee or otherwise charged and to accrue from day to day at the rate specified in 'Schedule 1' and capitalised on the dates or following the periods from time to time determined by the chargee (without necessity for notice to the chargor) in the normal course of business of the chargee. 41 Item 7 of Schedule 1 has the heading "Charged Property (Fixed Charge)" and refers to that property as "8 Capri Court, Noosa Heads, Queensland, 4567 when it is inherited by the Borrower". 42 Under cl 2(2), the chargor must pay to the chargee all or any part of the secured moneys on demand. Item 8 of Schedule 1 indicates that the loan will be terminated by death or default. Clause 9(l) states that the secured moneys will become immediately payable in the event of, inter alia, the bankruptcy of the chargor. 43 Under Item 10 of Schedule 1, "advanced moneys" are to be treated as a line of credit to be drawn at the request of the Borrower and distributed to any person or entity up to a limit of $500,000. 44 Item 11 of Schedule 1 provides: All moneys advanced to the Borrower as requested under this loan agreement/Deed of Charge will be recorded in "Schedule 2" and added at a later date as money is drawn. 45 Item 5 of Schedule 1 provides for interest of 7% calculated daily, capitalised at the end of each calendar month. 46 The copy of the Deed of Charge provided by Tania to the applicants attaches a Schedule 2. That schedule lists a series of months and an amount of money beside each month (for example, "January 2007 $3,500"). The range of months is from January 2007 to June 2011. Each amount is said to have been advanced to Ann by Tania as trustee of The Oakley Family Trust. 47 The total of the amounts in Schedule 2 is $452,418. Schedule 2 was obviously prepared after the date of the Deed of Charge (as was contemplated by Item 11 of Schedule 1) as it includes typed and handwritten dates which post-date the Deed of Charge. The Summary attached to the Proof of Debt appears consistent with Schedule 2. 48 The signatures of Tania and Ann appear on the Deed of Charge. Anthony George's signature also appears as a witness to Ann's and Tania's execution of the Deed of Charge. 49 The validity and genuineness of the Deed of Charge is in issue in this proceeding. The applicants allege that the Schedule 2 advances have been recently manufactured in order to secure Tania a priority interest in the Property. The Mortgage Agreement 50 There is in evidence a document entitled "Mortgage Agreement" dated 1 December 2015 (the Mortgage Agreement). Under that agreement, Tania is the mortgagee and Ann is the mortgagor. The mortgaged property is 8 Capri Court, Noosa Heads. The amount secured is $655,239. Ann's evidence is that this amount comprises of principal plus interest, less repayments in the sum of $57,000, advanced between 11 January 2007 and 10 June 2011 pursuant to the Deed of Charge. 51 Ann inherited the Property from her mother in November 2017, which is said by Tania to explain the timing of the 2015 Mortgage Agreement. The Mortgage Agreement is unregistered. The loans to Fintel by Ann and Ronald 52 Between 23 July 2003 and 10 November 2009, Ann and Ronald made various loans to Fintel, totalling $415,000. Tania admits that the loans were made, but the precise terms of the loans are not the subject of evidence. 53 There is in evidence an undated spreadsheet prepared by Fintel that has the heading "RL + AV Oakley loan to Fintel Financial Intelligence" and the subheading "RL & AV Oakley LOAN INTEREST". The spreadsheet appears to show that between 9 February 2004 and 26 July 2010, Fintel made a number of interest payments on the RL & AV Oakley loans, totalling $190,555.97. The applicants accept, as I understand it, that these interest payments are not included in Schedule 2 of the Deed of Charge. 54 The spreadsheet also appears to show that from about 6 August 2008, Fintel started to make repayments of the loan principal to Ann and Ronald. For example, the spreadsheet records a reduction in the loan principal from $415,000 to $390,000 between August and September 2008. That seems to correspond, at least broadly, with entries in Fintel's bank statements showing internet transfers of $10,000 on 5 and 11 September 2008 to RL & AV Oakley accompanied by the notation "Oakley Loan Return". Another example is that the spreadsheet records a further reduction in the principal to $370,000 between September and October 2008. Fintel's bank statements show apparently corresponding internet transfers of $10,000 each on 9 and 15 October 2008 accompanied by the notations "Oakley loan return" and "LOAN REPAYMENT" respectively. The spreadsheet shows that by October 2009, the loan principal had reduced to $195,000. 55 There were 39 payments made by Fintel that Tania claims amount to advances to RL & AV Oakley or Leeann Pty Ltd made at Ann's request. Each of those payments is evidenced by entries in the bank statements of Fintel and RL & AV Oakley or Leeann Pty Ltd. In Fintel's bank statements, each payment is described as either "Oakley Loan Return", "Loan Repayment", "Oakley loan repay", or "Ann Contract Paid". In RL & AV Oakley's and Leeann Pty Ltd's bank account statements, the payments are described as "Oakley Loan Return" or "Fintel FI Oakley Loan Return". 56 The relevance of the loans made by Ronald and Ann to Fintel is that the applicants allege that the moneys recorded in the Fintel bank account statements as being paid to RL & AV Oakley or Leanne Pty Ltd were loan repayments and not, as Tania claims, advances made at the request of Ann under the terms of the Deed of Charge. The evidence of Tania Oakley 57 Tania has been the trustee of The Oakley Trust since 12 August 2002. She points out that under the trust deed, The Oakley Trust is able to lend money and charge interest to any of its beneficiaries. 58 Tania deposes that she did not receive any of the money lent to Fintel by Ann and Ronald. She notes that on 30 June 2010, the Fintel balance sheet showed a debt owing to The Oakley Trust of $1,456,659. 59 Tania accepts that between 9 February 2004 and 26 July 2010, Fintel made payments to RL & AV Oakley in respect of the loan, totalling $190,555.97. However, she deposes that these amounts are not included in the list of payment/advances accompanying the Proof of Debt. 60 Tania deposes that on 29 June 2008, she entered into the Deed of Charge as trustee for The Oakley Trust. She states that The Oakley Trust made payments to the RL & AV Oakley partnership and Leeann Pty Ltd from 11 January 2007 to 10 June 2009. Those payments are listed in Schedule 2 to the Deed of Charge. She deposes that the payments were made at the request of Ann under the Deed of Charge. 61 Tania states that none of the payments in Schedule 2 were recorded as repayments of the loan made to Fintel by Ann and Ronald in Fintel's financial records, nor do they operate to reduce the loan debt listed in Fintel's balance sheets. 62 Tania deposes that The Oakley Trust made payments to Leeann Pty Ltd at the request of Ann on 27 June 2013 and 26 July 2013, totalling $8,000, that are not shown in Schedule 2 to the Deed of Charge, but are evidenced by bank statements for The Oakley Trust. She states that The Oakley Trust did not owe any money to RL & AV Oakley or Leeann Pty Ltd. She says that apart from the two payments made in 2013, all moneys advanced to the RL & AV Oakley partnership and Leeann Pty Ltd are included in Schedule 2. 63 Tania deposes that on about 28 July 2008, Ann requested that she pay $4,000 into Meagan's mortgage account as Meagan could not pay it and Ann wanted to help her. She says she transferred the money at Ann's request under the Deed of Charge. Tania states that on about 25 July and 29 October 2009, she received two further requests from Ann to advance money to Meagan on Ann's behalf under the terms of the Deed of Charge. She then transferred $5,000 to Meagan on 26 August 2008 and $5,000 on 30 October 2008. 64 Tania deposes that on about 20 November 2008, she had a face to face discussion with Ann where Ann expressed her desire to help Meagan dig herself out of the financial hole she was in. Tania requested that she pay Meagan's mortgages and rates and put it against the Deed of Charge. Tania transferred $25,000 to Meagan on 27 November 2008 and a further $22,018.03 on 3 December 2008. She notes that none of the money advanced to Meagan was recorded as a trust distribution in Meagan's tax return. The money advanced to Meagan was included in Schedule 2 of the Deed of Charge. 65 Tania deposes that she was informed by Ann that Ann had a loan agreement with Ms Pradella. Tania states that The Oakley Trust received $40,000 of the Pradella loan money by way of repayment of money owed by Ann to The Oakley Trust and that this amount has been deducted from the total owed by Ann. 66 Tania deposes that The Oakley Trust paid some of Ann's loan repayments, totalling $32,200, directly to Ms Pradella at the request of the bankrupt. Those amounts are recorded in Schedule 2 to the Deed of Charge. 67 Tania deposes that between 30 June 2005 and 30 June 2010, The Oakley Trust lent Fintel a total of $1,456,659. She says that during that time, Ann was employed by Fintel as its accounts manager and had full control over all accounts, bookkeeping and payments. She says that Ann carried out all the banking and money transfers from Fintel's account. From August 2008, Ann started taking money directly out of the Fintel account and asking Tania to add it to the loan amount secured by the Deed of Charge. She would also request that The Oakley Trust pay more money to Fintel to cover the amounts that she withdrew. She deposes that Ann withdrew a total of $252,000 in this manner, and those amounts were added to Schedule 2 of the Deed of Charge. Tania states that as she was not in control of Fintel's bank account, she was relying on Ann to tell Tania what she had taken so that she could add it to the running tally she kept. 68 Tania deposes that all the money listed in the "Transfer Schedule" attached to the applicants' statement of claim is secured by the Deed of Charge (the Transfer Schedule summarises Schedule 2 to the Deed of Charge). 69 Tania deposes that in November 2015, Ann inherited the Property from her mother. On 1 December 2015, Tania, as trustee for The Oakley Trust, entered into the Mortgage Agreement with Ann. She notes that the Mortgage Agreement states that the mortgagor agrees to grant the mortgagee a Registered Mortgage over the Property. 70 Tania deposes that when Ann inherited the Property, there was (and remains) a "reverse mortgage" over the Property granted by Ann's mother. That mortgage is in favour of the Commonwealth Bank and is for approximately $160,000. She was informed by Ann that the Commonwealth Bank had given her 12 months to either pay out the mortgage or sell the Property. Tania wanted to keep the Property rather than sell it, but The Oakley Trust could not exercise its rights to take possession of the Property without paying out the reverse mortgage. 71 Tania deposes that she was a single parent on a pension at the time and could not obtain a loan herself. She decided to set up what is referred to as a "wrap" or "vendor financing" deal with an associate, Anthony Mitchell. The deal involved registering two mortgages and using the equity secured by The Oakley Trust through the Deed of Charge and the Mortgage Agreement. A sales contract was signed on 16 September 2016 with Ann as the seller and A & E Investments Pty Ltd as trustee for the Capri Trust as the buyer. The house had been valued at $640,000 and the sale price was $440,000. 72 In Tania's oral evidence, she explained that the sale was to be made in the exercise of The Oakley Trust's powers under the securities it held. A & E Investments Pty Ltd was to obtain a loan to pay out the reverse mortgage and to receive $125,000 as payment for the first two year's interest and a fee for its services. After paying out the reverse mortgage, there would be about $151,000 in equity which would be acquired by The Oakley Trust. 73 Tania deposes that one of the mortgages was rejected for registration by the Titles Office on about 11 October 2016. The sale of the Property did not proceed. Tania's evidence about the proposed transactions was somewhat confusing and the transactions were not fully explained. 74 Tania deposes that the Registered Mortgage for $151,000 over the Property is the "crystallisation" of part of the debt secured by the Deed of Charge. She says that this is consistent with the terms of the Deed of Charge and the Mortgage Agreement. 75 Tania paid eleven amounts to RL & AV Oakley and Leeann Pty Ltd totalling $92,200 between 11 January and 10 June 2009. She paid five amounts to Ms Pradella totalling $32,200 between 12 November 2010 and 10 June 2011. She made five payments to Meagan totalling $61,018.03 between 29 July 2018 and 3 December 2018. Fintel made 39 payments to RL & AV Oakley totalling $252,000 between 5 August 2008 and 10 December 2010. Tania deposes that each of these payments was made at the request of Ann under the terms of the Deed of Charge. The evidence of Ronald Oakley 76 Ronald deposes that on about 1 July 2008, he saw the Deed of Charge and saw that it had been signed by Ann and Tania and witnessed by Anthony George. 77 The cross-examination suggested that Ronald may have been mistaken, but did not suggest that he was lying. He maintained his evidence under cross-examination. The evidence of Anthony George 78 Tania relies upon an affidavit of Mr George in which he deposed that he saw Tania and Ann signing a document on 29 June 2008, and that he then signed the document as a witness. That document was apparently the Deed of Charge. 79 Mr George's affidavit was affirmed on 20 July 2017. As I have said, he could not be cross-examined upon his affidavit as he has since passed away. The credibility of Tania's evidence 80 Tania's evidence is that Ann requested that The Oakley Trust make each of the payments under the terms of the Deed of Charge. Tania's evidence is also that Ann would take money from Fintel and request that these amounts be added to the amounts secured under the Deed of Charge. Tania argues that the advances or loans provided the consideration for the Registered Mortgage and the Mortgage Agreement. There is a substantial issue as to whether Tania's evidence should be accepted. 81 I have serious reservations about the credibility of Tania's evidence. The first of my reservations concerns Tania's response to an allegation in the statement of claim that a District Court judge had found that the Pradella loans were made "in the context of a need for such advances as a consequence of the business-related financial difficulties of the [Bankrupt's] daughter". Tania asserted in her defence that she "did not have business-related financial difficulties". Under cross-examination, Tania maintained her denial of any business-related financial difficulties in the relevant period. She gave evidence she "had no money", but "there was no-one coming after me for money". However, her denial of financial difficulties and assertion that there was no one coming after her is implausible in light of other evidence. 82 The Australian Securities and Investments Commission commenced investigating Tania's business activities in September 2009. The sentencing judge found that in 2009, Tania was making big losses but dishonestly informing investors that the investments were still intact and profitable. One of the investors, Mrs Drysdale, was persistent in trying to get back the money she had lost. Mrs Drysdale had been friends with the Oakley family and her daughter knew Tania. Mrs Drysdale accused Tania of running a Ponzi scheme and was alleging that she had suffered losses because of Tania's fraudulent conduct. As a result of Tania's dishonest conduct in issuing false statements, Mrs Drysdale had at least lost the opportunity to limit her losses. Mrs Drysdale placed pressure on Ann, and her daughter placed pressure on Tania, to repay her money. In March 2010, Ann paid Mrs Drysdale $196,000 from money she had borrowed from Ms Pradella. Tania's solicitor asked Mrs Drysdale to sign a confidentiality agreement. Tania maintains that she did not owe Mrs Drysdale any money, that she would never have made the decision to repay Mrs Drysdale and that the decision to repay was Ann's alone. 83 The effect of Tania's evidence must be that Ann decided of her own volition to borrow money from Ms Pradella to gratuitously pay Mrs Drysdale the $196,000 she claimed was lost as a result of Tania's fraudulent conduct. This was apparently done without Tania asking Ann pay the money, and in the face of Tania's assertion that she did not owe Mrs Drysdale any money. In addition, Ann, without any involvement by Tania, must have had Tania's solicitor prepare a confidentiality agreement and ask Mrs Drysdale to sign it. Further, while Tania saw Ann's affidavit of 28 September 2016 (where she deposes to having discussed a loan with Ms Pradella because she was "trying to help my daughter") before the affidavit was filed, she did not have her mother revise the affidavit to say that Tania did not in fact need help. 84 It may be seen that a number of aspects of Tania's evidence about her lack of financial difficulty and the reasons for the payment to Mrs Drysdale by Ann are not credible. Her evidence that "there was no-one coming after me for money" is quite inconsistent with the pressure applied by Mrs Drysdale and her daughter and the accusations of fraudulent conduct made by Mrs Drysdale. Tania's claim that she was not involved in the transaction with Mrs Drysdale is inconsistent with Tania's solicitor having Mrs Drysdale enter a confidentiality agreement that would benefit Tania. Tania's admission that she had no money and Ann's statement that her family was in a severe financial situation trying to help her daughter are inconsistent with Tania's evidence that she was in no financial difficulty. The implausibility of these aspects of Tania's evidence flows into and affects the credibility of the remainder of her evidence. 85 More generally, I was unimpressed with Tania's demeanour under cross-examination. I regard other aspects of her evidence as implausible. These include her evidence that payments from Fintel to Ann were made under the terms of the Deed of Charge, when contemporary documentary evidence indicates that the payments were loan repayments. I will mention other aspects of Tania's evidence that I do not accept later in these reasons. 86 Further, Tania committed offences of dishonesty, for which she was convicted and sentenced in the District Court. Those offences demonstrate a tendency towards dishonesty concerning financial matters that was, in my opinion, reflected in her evidence in the present proceeding. 87 For these reasons, I am only prepared to accept Tania's evidence to the extent that it consists of admissions, is uncontentious or is adequately corroborated by other evidence. Section 120 of the Bankruptcy Act 88 Section 120 of the Act provides: 120 Undervalued transactions Transfers that are void against trustee (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 transfer took place in the period beginning 5 years before the commencement of the bankruptcy and ending on the date of the bankruptcy; and (b) the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property. … Meaning of transfer of property and market value (7) 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. 89 "Property" is defined in s 5 of the Act to mean: real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property. 90 The onus of proof is on the applicants: see Gomez v Carrafa (Trustee) [2018] FCA 201 at [118]. The issues required to be considered in this case are: (1) Whether the Registered Mortgage and the Mortgage Agreement are each a "transfer of property" to Tania by Ann. (2) Whether the transfers took place in the period beginning five years before the commencement of the bankruptcy and ending on the date of the bankruptcy. (3) Whether Tania gave any consideration for the Registered Mortgage and the Mortgage Agreement. 91 I will consider each of these issues in turn. Whether the Registered Mortgage and the Mortgage Agreement are each a "transfer of property" by Ann 92 In Official Trustee v Pastro [1999] FCA 1631, Finn J held at [68] that a mortgage is a "settlement of property" within s 120(1) of the Act (as the provision then read). On appeal, in Pastro v Official Trustee in Bankruptcy [2000] FCA 744, Finn J's judgment was upheld, although that issue was not argued. In Frost v Sheahan [2012] FCAFC 46, when concluding that a mortgage is a "transfer of property" for the purposes of s 121(1) of the Act, the Full Court at [69] expressly approved Finn J's view. Their Honours saw no relevant distinction between a "settlement" and a "transfer". Their Honours held at [69] that, "a mortgage creates an interest in property and it is that interest which is transferred." 93 I find that entry into the Registered Mortgage was a "transfer of property" within s 120(1) of the Act by Ann to Tania. So too was entry into the Mortgage Agreement. Whether the transfers took place in the period beginning five years before the commencement of the bankruptcy and ending on the date of the bankruptcy 94 Ann's bankruptcy commenced on 6 October 2016. The Registered Mortgage was entered on 29 September 2016. The Mortgage Agreement was entered on 1 December 2015. 95 The transfers of property plainly occurred within five years of the date of bankruptcy. Whether Tania gave any consideration for the Registered Mortgage and the Mortgage Agreement 96 It is necessary to begin by considering whether the advances or loans that the Registered Mortgage and the Mortgage Agreement purport to secure were in fact made. If not, then there was no consideration given by Tania. 97 The Registered Mortgage is expressed to secure an advance of $151,000 to Ann by Tania as trustee of The Oakley Family Trust pursuant to the terms of a Loan Agreement. The applicants submit that there was no Loan Agreement and no advance of $151,000 to Ann. 98 Under cl 2.1 of the Registered Mortgage, Ann acknowledges that Tania, as trustee of The Oakley Trust, "has advanced the sum of $151,000 to [Ann] pursuant to the terms of the Loan Agreement". The "Loan Agreement" is defined in cl 1.1 to mean "the agreement…dated on or about the date of this Mortgage". The date of the Registered Mortgage was 29 September 2016. Under cl 2.3 of the Registered Mortgage, the mortgage secures "the due and punctual payment of the secured money". The term "secured money" is defined as "money secured by or payable under the Loan Agreement by the Mortgagor to or at the direction of the Mortgagee". 99 These clauses contemplate that, firstly, there is in existence a written Loan Agreement bearing a date of about 29 September 2016 and, secondly, that Tania has advanced $151,000 to Ann pursuant to the terms of that Loan Agreement. 100 In fact, there is no written Loan Agreement dated about 29 September 2016. Tania relies on cl 1.2 of the Registered Mortgage, which provides that "The Loan Agreement will be deemed to be incorporated into and form part of this Mortgage as if it were set out in the Mortgage in full". She argues that the effect of this clause is that the Loan Agreement and the Registered Mortgage are one and the same, and that made it unnecessary for there to be a separate Loan Agreement. However, cll 1.1, 2.2 and 2.3 demonstrate that the parties intended that there would be a separate written Loan Agreement (that is because such agreement was to be "dated" about 29 September 2016). Clause 1.2 would have incorporated the terms of the Loan Agreement into the Mortgage if the Loan Agreement had been made. But, as no Loan Agreement was made, there was nothing to incorporate. Clause 1.2 does not have the effect that Tania contends for. 101 The Registered Mortgage refers to a Loan Agreement that does not exist and to an advance to Ann pursuant to the terms of the Loan Agreement that was not made. As there is no Loan Agreement, Tania could not have advanced any sum to Ann "pursuant to the terms of the Loan Agreement". Further, Tania did not in fact advance $151,000 to Ann on or about 29 September 2016. As there is no Loan Agreement, there is no "secured money". 102 Tania asserts the figure of $151,000 came from the equity that would remain in the Property following a complicated series of transactions involving the sale of the Property, a payment from the sale proceeds to the purchaser and discharge of the reverse mortgage to Commonwealth Bank. The mortgage was apparently executed and registered in anticipation that the contract for the sale of the Property would be completed. However, the contract was not completed. No amount of $151,000 was paid to Ann, nor has the Commonwealth Bank's reverse mortgage been paid out. The uncompleted transaction for the sale of the Property does not provide any consideration for entry into the Registered Mortgage. 103 Tania pleaded and asserted in her evidence that the consideration for the Registered Mortgage was the amounts (exceeding $151,000) paid at Ann's request under the terms of the Deed of Charge. However, the objective evidence does not support that assertion. The Registered Mortgage document does not refer to money advanced under the Deed of Charge as providing consideration. It refers only to the $151,000 supposedly advanced pursuant to the terms of the non-existent Loan Agreement. That is inconsistent with any advances under the Deed of Charge being the consideration or part of the consideration for the grant of the Registered Mortgage. Even if advances were provided under the Deed of Charge, that does not mean that the advances were the consideration. I am not willing to accept Tania's uncorroborated evidence (even assuming its relevance and admissibility) on this issue. 104 I find that no consideration was provided for the grant of the Registered Mortgage. That is enough to require a conclusion that the Registered Mortgage is void against the applicants pursuant to s 120(1) of the Act. 105 For two reasons, it remains necessary to consider whether any amounts were advanced or lent by Tania at Ann's request and whether Ann requested that any such amounts be advanced under the terms of the Deed of Charge. The first reason is against the possibility that I may be wrong in concluding that any moneys advanced under the Deed of Charge did not form part of the consideration for the Registered Mortgage. The second is that whether the Mortgage Agreement is void under s 120(1) of the Act depends upon whether advances were made, which in turn requires consideration of whether payments were made under the terms of the Deed of Charge. 106 The applicants submit that the genuineness and validity of the Deed of Charge are in serious doubt and that Schedule 2 to the Deed of Charge has been recently manufactured. They submit, in the alternative, that the amounts listed in Schedule 2 (and in the Summary attached to the Proof of Debt) were not advances or loans made at Ann's request, but were trust distributions, repayments of the Fintel loan to RA & AV Oakley or payments by Tania (for her own benefit) of the Pradella loans. 107 I will first consider the applicants' submission that the Deed of Charge is not genuine. 108 Tania's evidence is that the Deed of Charge was made on 29 June 2008. That evidence is corroborated by the evidence of Mr George and Ronald Oakley. 109 Mr George deposed that he witnessed the signing of the Deed of Charge by Tania and Ann on the date set out in that document. The evidence does not explain the relationship, if any, between Mr George and Tania and Ann. He was unable to be cross-examined. Nevertheless, I consider that I should give weight to his evidence. 110 Ronald gave evidence that he saw the Deed of Charge on or about 1 July 2008 and saw that it had been signed by Ann and Tania and witnessed by Mr George. There was no substantial challenge to his evidence in cross-examination. He was not significantly pressed about the circumstances in which he came to see the document, or how it was that he could recall seeing the document some 10 years earlier. It was not suggested that he was untruthful in his evidence. 111 This aspect of Tania's evidence is corroborated by credible evidence. I accept that the Deed of Charge was made on 29 June 2008. 112 In light of my finding as to the date of entry into the Deed of Charge, there is no reason to doubt that the Mortgage Agreement was entered on the date asserted by Tania. I find that the Mortgage Agreement was entered on 1 December 2015. 113 I will next consider the applicants' submission that the amounts listed in Schedule 2 of the Deed of Charge (and in the Summary attached to the Proof of Debt) were not advances or loans made at Ann's request. 114 Tania's defence pleads that the Deed of Charge and Mortgage Agreement operate to secure the advances because the advances were "made at the request of Ann". Tania gave evidence that the payments by The Oakley Trust to RL and AV Oakley, Leeann Pty Ltd, Meagan and Ms Pradella were made "at the request of Ann" and "under the terms of the Deed of Charge". Her evidence is also that Ann took money from Fintel and asked Tania to "add it to the loan amount secured by the Deed of Charge". 115 Under cl 3 of the Deed of Charge, the floating and fixed charge secures the payment or repayment to The Oakley Trust of "secured moneys". The definition of "secured moneys" is found in cl 2(1). The applicants argue that this definition, together with Item 11 of Schedule 1 to the Deed of Charge, requires that Ann must have requested that moneys be advanced under the terms of the Deed of Charge if the charge is to operate in respect of such advances. Tania's evidence is that Ann in fact requested that the amounts listed in Schedule 2 be advanced under the terms of the Deed of Charge, but also argues that the charge would operate even in respect of moneys owed by Ann that were not specifically requested. 116 Item 11 of Schedule 1 to the Deed of Charge envisages that the moneys advanced will be "requested under this loan agreement/Deed of Charge" by Ann. It is not clear whether Item 11 forms part of the definition of "secured moneys", and the issue was not the subject of argument. However, it is enough to proceed (in Tania's favour) on the basis that the secured moneys are defined exclusively in cl 2(1) of the Deed of Charge. Subclauses (b), (c) and (d) of cl 2(1) require that Ann have requested "accommodation". Subclauses (a), (e) and (f) do not specifically refer to a request made by Ann. However, as with subcll (b), (c) and (d), subcl (a) requires that there be financial "accommodation" extended to Ann. The expression "accommodation" refers to a loan (see item 2(a) of the definition of "accommodation" in the Oxford Dictionary). There could be no loan unless there was a request of some kind made by Ann for moneys to be lent. Under subcl (e), the moneys must be moneys that Tania is entitled to "debit and charge to any account of the chargor". That entitlement could only arise with Ann's agreement. Subclause (f) secures the payment of interest on moneys otherwise secured under cl 2(1). 117 Therefore, to come within the definition of "secured moneys" in the Deed of Charge, a payment made by The Oakley Trust to Ann or some other person must have been made at Ann's request. It is clear that any payments made by The Oakley Trust that were not a form of financial accommodation to Ann and not made at Ann's request, such as trust distributions and payments made unilaterally by Tania for her own benefit or the benefit of companies associated with her, would not come within that definition. 118 Tania's evidence that the advances listed in Schedule 2 of the Deed of Charge were made at the request of Ann could, if true, have been corroborated by Ann. However, Ann was not called to give evidence. Tania accepted that she lives with Ann and gets on very well with her, but that she had not asked Ann to give evidence. She offered no explanation for why she failed to call Ann to give evidence. I draw an inference under the rule in Jones v Dunkel (1959) 101 CLR 298 that Ann's evidence would not have assisted Tania's case. This inference is an important thread that runs throughout my consideration of the payments in dispute. 119 It is convenient to start by considering the payments from The Oakley Trust to Ms Pradella between 12 November 2010 and 10 June 2011. These consisted of three payments of $8,000, one of $4,000 and one of $4,200, totalling $32,200. 120 Tania's evidence is that these payments were repayments of money Ann owed to Ms Pradella and were made at Ann's request. Schedule 2 to the Deed of Charge, the accompanying document entitled "copy of my running tally" and the schedule accompanying the Proof of Debt were prepared by Tania and do not have any corroborative value. I am not prepared to accept Tania's evidence in the absence of adequate corroborative evidence. 121 In light of the evidence and matters set out at [19]–[26] and [80]–[83] above, it is probable that Ann obtained at least part of the Pradella loans to assist Tania with her financial difficulties, that Tania benefited from the loans and that Tania accepted responsibility to make payments of interest to Ms Pradella from the funds of The Oakley Trust. I do not accept that Tania paid Ms Pradella at Ann's request, nor do I accept that Ann requested that the payments be made under the terms of the Deed of Charge. 122 I will next consider the payments from The Oakley Trust to Meagan. Tania transferred money to Meagan on five occasions between 29 July 2007 and 3 December 2008, totalling $61,018.03. Her evidence is that she transferred the money at Ann's request under the terms of the Deed of Charge. 123 Tania has produced Meagan's tax return to demonstrate that none of the money was paid as a trust distribution by Meagan. I am not prepared to give the tax return any weight. Tania did not call Meagan to give evidence. Tania and Meagan apparently get on well enough for Meagan to have provided Tania with her tax return and Tania gave no evidence as to why Meagan was not called. I draw a Jones v Dunkel inference that Meagan's evidence would not have assisted Tania's case. 124 I do not accept Tania's evidence that Ann requested the payments to be made to Meagan under the terms of the Deed of Charge. It is probable that the payments were trust distributions to Meagan as a beneficiary of The Oakley Trust. 125 I will turn next to the payments from Fintel to RL & AV Oakley. Tania's evidence is that Ann would take money from Fintel and request that those amounts be added to the amounts secured under the Deed of Charge. 126 The payments from Fintel were made between 5 August 2008 and 10 December 2010 and totalled $252,000. The contemporary documentary evidence described at [53]–[54] shows, however, that these were repayments of the loans given by RL & AV Oakley to Fintel. These documents are, in my opinion, far more reliable than Tania's evidence. The payments by Fintel were not advances or loans to Ann or to Ann and Ronald. 127 Tania's explanation for why Fintel's bank account statements and the spreadsheet record the payments as loan repayments is that Ann was employed by Fintel and was responsible for Fintel's accounts. Tania deposes that she "was not aware that Ann had been applying the money she was taking out of Fintel against previous money given to Fintel by RL & AV Oakley". Tania was a director and shareholder of Fintel. It is clear from her detailed evidence that she has had a thorough knowledge of the financial affairs of the various entities and trusts she has been associated with. It is implausible that she would not have known that the payments were loan repayments. Further, there is no plausible explanation for why Ann would record the payments as loan repayments if they were not. 128 Tania has prepared a schedule showing a pattern of payments from The Oakley Trust, to Fintel, followed by payments from Fintel to RL & AV Oakley within a few days. She deposes this is consistent with The Oakley Trust reimbursing Fintel for advances requested by Ann. However, it is more consistent with Tania advancing money to Fintel (in which she had an interest) to allow Fintel to repay the loan to RL & AV Oakley. 129 Finally, I will consider the payments from The Oakley Trust to RL & AV Oakley or Leeann Pty Ltd. Tania's evidence is that these payments were made at Ann's request under the terms of the Deed of Charge on eleven occasions between 11 January 2007 and 10 June 2009, totalling $92,200. 130 The relevant entries in the bank statements for The Oakley Trust merely refer to "RL & AV Oakley", while those for RL & AV Oakley merely refer to "Oakley Trust". They do not state the reason for any of the payments. 131 One of the relevant payments was $18,900 to Leann Pty Ltd on 10 June 2009. However, that payment was in fact made by Tanoak as trustee for The Oakley Enterprises Trust. The corresponding entry in Leann Pty Ltd's bank statement has the notation "Oakley Trust" (rather than "Oakley Enterprises Trust"). There seems to have been a substantial intermingling of Tania's financial affairs between various trusts and entities and I am prepared to infer that Tania arranged for the payment to be made by Tanoak on behalf of The Oakley Trust. 132 However, the only evidence that Ann requested that payments be made to RL & AV Oakley and Leeann Pty Ltd and did so under the terms of the Deed of Charge comes from Tania. I do not accept that evidence. It may be noted that Ronald was called to give evidence, but was silent as to the reasons for the payments. A Jones v Dunkel inference may be drawn where a witness is called, but relevant evidence is not led from the witness: Commercial Union Assurance Co of Australasia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418–419. I draw such an inference. It is probable that the payments were trust distributions made to or on behalf of beneficiaries of The Oakley Trust. I am assisted in reaching this conclusion by Tania's claims in respect of the Fintel payments, which were obviously untrue. 133 I note that Tania has not sought to rely upon s 120(3) of the Act and has not attempted to demonstrate that Ann was solvent at the time of the transfers. 134 I will turn to consider whether Tania gave any consideration for the Mortgage Agreement. Under cl 1 of the Mortgage Agreement, Tania agreed to advance $655,239 to Ann. Although cl 1 contemplates that the advances were to take place after entry into the Mortgage Agreement, Tania's evidence is that the principal is the sum secured by the Deed of Charge, less repayments in the sum of $57,000, plus interest. The question of whether Tania provided any consideration for the Mortgage Agreement depends upon whether the relevant payments were made at Ann's request under the terms of the Deed of Charge. I have concluded that they were not. Therefore, there was no consideration provided for the Mortgage Agreement. 135 I find that the payments made by The Oakley Trust to RL & AV Oakley, Leanne Pty Ltd, Meagan and Ms Pradella were not advances or loans made at Ann's request. I find that Ann did not request that the payments made by Fintel be added to the amounts secured under the Deed of Charge. I find that such payments by The Oakley Trust were not consideration for the Registered Mortgage and the 2015 Mortgage Agreement. I find that Tania provided no consideration for the Registered Mortgage and the Mortgage Agreement. 136 I also note that the payments relied upon by Tania, were made between 11 January 2007 and 10 June 2011, predating the Registered Mortgage and the Mortgagee Agreement. In Official Trustee in Bankruptcy v Lopatinsky (2003) 129 FCR 234, the Full Court considered at [94] that the term "consideration" in s 120(1)(b) cannot be "read in anything other than its legal sense" and cannot be "something less than the ordinary legal and commercial understanding of that term". In Official Trustee in Bankruptcy v Mateo (2003) 127 FCR 217, the Full Court held at [108] that consideration under the provision must adhere to the legal definition of the term, and cannot be past consideration. The payments listed in Schedule 2 of the Deed of Charge were past consideration. This is an additional reason why those payments were not consideration for the Registered Mortgage and the Mortgage Agreement. 137 For these reasons, I find that the Registered Mortgage and the Mortgage Agreement are void against the trustee pursuant to s 120(1) of the Act. Section 121 of the Bankruptcy Act 138 Section 121 of the Act provides: 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 … 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. … 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. 139 Section 6 of the Act states: A reference in this Act to an intent to defraud the creditors of a person or to defeat or delay the creditors of a person shall be read as including an intent to defraud, or to defeat or delay, any one or more of those creditors. 140 Solvency is dealt with in subsections 5(2) and (3) of the Act as follows: (2) A person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable. (3) A person who is not solvent is insolvent. 141 The issues that arise are: (1) Whether the Registered Mortgage and the Mortgage Agreement are each a "transfer of property" by Ann. (2) Whether the property would probably have become part of the Ann's estate or would probably have been available to creditors if the property had not been transferred. (3) Whether it can reasonably be inferred from all the circumstances that, at the time of the transfer, Ann was, or was about to become, insolvent. (4) Whether Ann's main purpose in making the transfer was, or is taken to have been, to prevent the transferred property from becoming divisible among her creditors. 142 I will consider each of these issues. Whether the Registered Mortgage and the Mortgage Agreement are each a transfer of property by Ann 143 For the reasons I have given in relation to s 120(1) of the Act, entry into the Registered Mortgage and the Mortgage Agreement were transfers of property by Ann. Whether the Property would probably have become part of the Ann's estate or would probably have been available to creditors if the Property had not been transferred 144 The relevant property is the secured interests in the Property acquired by Tania under the Registered Mortgage and the Mortgage Agreement. The Property would otherwise become part of Ann's estate under s 58 of the Act and have become available to Ann's creditors when she became bankrupt pursuant to s 116 of the Act unencumbered by those interests. In my opinion, this element of s 121(1) is satisfied. Whether it can reasonably be inferred from all the circumstances that, at the time of the transfers, Ann was, or was about to become, insolvent 145 The onus of proving the elements of s 121(1) of the Act falls on the applicants. However, the applicants allege that the main purpose of the Registered Mortgage and the Mortgage Agreement was to prevent the transferred property from becoming divisible amongst the transferor's creditors. Pursuant to s 121(2), that purpose is taken to be the purpose if it can reasonably be inferred from all the circumstances that, at the time of the transfer, Ann was, or was about to become, insolvent. 146 In Sandell v Porter (1966) 115 CLR 666, Barwick CJ stated at 670 that, "It is the debtor's inability, utilizing such cash resources as he has or can command through the use of his assets, to meet his debts as they fall due which indicates insolvency". 147 At the time the Registered Mortgage was signed and lodged for registration on 29 September 2016, Ann was a defendant in a proceeding in which Ms Pradella was seeking summary judgment in the amount of $668,000 plus indemnity costs. The summary judgment application had been adjourned to 30 September 2016 upon Ann's application. She did not appear at the adjourned hearing and did not contest the application for summary judgment. That Ann was unable to pay the debt is demonstrated by the fact that she filed a Debtor's Petition five days after summary judgment was given against her and six days after the date of the Registered Mortgage. 148 The 2015 Mortgage Agreement was entered on 1 December 2015, some 10 months prior to the date of bankruptcy. At that time, Ann owed Ms Pradella $580,000 and interest of approximately $50,000. In her affidavit of 28 September 2016, Ann deposed that she had told Ms Pradella that she could no longer keep up the interest payments as she had run out of money. 149 In these circumstances, it can reasonably be inferred that at the dates when the Registered Mortgage and the Mortgage Agreement were entered, Ann was insolvent. 150 Tania has not raised any argument that ss 121(4)(b) and (c) apply. Whether Ann's main purpose in making the transfer was, or is taken to have been, to prevent the transferred property from becoming divisible among her creditors 151 The effect of s 121(2) of the Act is that Ann's main purpose in giving the Registered Mortgage and the Mortgage Agreement is deemed, or conclusively presumed to be, to prevent the transferred property from becoming divisible among her creditors: see Re Jury; Ashton v Prentice (1999) 92 FCR 68 at [58], [59]; Marchesi v Apostolou [2007] FCA 986 at [95]; Lo Pilato (Trustee) v Kamy Saeedi Lawyers Pty Ltd (2017) 249 FCR 69 at [158], [160]. 152 I would have reached the same conclusion independently of s 121(2) of the Act. The financial affairs of Ann and Tania have been significantly intermingled since at least 2007. Tania is the trustee of The Oakley Trust, and both Ann and Tania are beneficiaries. They are mother and daughter. I have found that Tania gave no consideration for the Registered Mortgage and the Mortgage Agreement. Tania's evidence is that the Property was valued at $640,000 in 2016, with a mortgage debt of $160,000 owing to the Commonwealth Bank. Tania's Proof of Debt asserts a debt of $702,446.31. The obvious inference is that Ann intended that Tania should have secured interests over the Property that would take priority over and effectively defeat the claims of unsecured creditors. I draw that inference. 153 I find that Ann's main purpose in giving Tania the Registered Mortgage and the Mortgage Agreement is both taken to have been, and was in fact, to prevent the transferred property from becoming divisible among her creditors. The Registered Mortgage and the Mortgage Agreement are void against the applicants pursuant to s 121(1) of the Act. 154 I will hear the parties as to the appropriate form of declaratory and other orders reflecting the findings I have made. I will also hear the parties as to the costs of the proceeding. I certify that the preceding one hundred and fifty-four (154) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah. Associate: Dated: 14 February 2019