The Trustees of the Property of John Daniel Cummins, A Bankrupt v Cummins [2006] HCA 6

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GUMMOW, HAYNE, HEYDON AND CRENNAN JJ

THE TRUSTEES OF THE PROPERTY OF

JOHN DANIEL CUMMINS, A BANKRUPT APPELLANTS

AND

MARY ELIZABETH CUMMINS AND ANOR RESPONDENTS

The Trustees of the Property of John Daniel Cummins, A Bankrupt

v Cummins [2006] HCA 6

7 March 2006

S286/2005

ORDER

1. Appeal allowed with costs.

2. Set aside the orders of the Full Court of the Federal Court of Australia made on 30 July 2004 and, in their place, order that the appeal to that Court be dismissed with costs.

On appeal from the Federal Court of Australia

Representation:

B A J Coles QC with C R C Newlinds SC and P Kulevski for the appellants (instructed by Clayton Utz)

W Sofronoff QC with M A Ashhurst for the respondents (instructed by Russell and Company)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

The Trustees of the Property of John Daniel Cummins A Bankrupt v Cummins

Bankruptcy − Transfer to defeat creditors − Main purpose − Bankrupt transferred interest in matrimonial property to first respondent wife and transferred shares to second respondent − Whether evidence sufficient to permit inference that bankrupt's main purpose in transferring assets was to defeat or delay creditors − Whether main purpose of transfers to protect assets against future professional negligence suits − Whether transfer of assets void against trustee in bankruptcy − Bankruptcy Act 1966 (Cth), s 121(1)(b).

Evidence − Judicial notice − Bankrupt, a Queen's Counsel who maintained two sets of chambers, failed to lodge tax returns for about 45 years − Whether inference should be drawn that bankrupt had a taxable income at a level which gave rise to a liability to pay income tax − Whether income disclosed in later tax returns relevant to establish income from earlier period of time − Whether Australian Taxation Office a creditor of the bankrupt.