Thompson v Smith [1976] HCA 56

High Court of Australia Gibbs, Mason and Aickin JJ. Thompson v Smith [1976] HCA 56

ORDER Appeal allowed with costs. Judgment of the Federal Court of Bankruptcy varied by deleting the declaration numbered 1.

Cur. adv. vult.

The following written judgments were delivered:—

Nov. 1 Gibbs J.

The appellant is the wife of Frederick Verner Thompson who on 7th February 1973 executed a deed of assignment under Pt X of the Bankruptcy Act 1966 Cth. The respondent is the trustee of the deed. The appellant and her husband were at all material times the registered proprietors as joint tenants of an estate in fee simple in land situated at Yowie Bay on which was erected a dwelling-house in which they lived. On 1st July 1968 they executed a memorandum of mortgage over the land in favour of the Bank of New South Wales. The mortgage was a second mortgage, but that is not material. The mortgage was given to secure advances made or to be made to the husband by the bank. It was signed by the appellant as "Mortgagor" and by the husband as "Mortgagor and Debtor". The husband told the appellant that he needed overdraft accommodation for his business account and that his bankers required as security a mortgage over the property at Yowie Bay. She agreed to execute a mortgage on condition that her husband would be solely responsible for any liability incurred to the bank under the mortgage and that any payments to the bank on account of moneys due were to be repaid by him out of his own funds. The mortgage has not been discharged.

Upon application made by the respondent the Bankruptcy Court made a declaration that the interest of the appellant in the land is, within s. 111 of the Bankruptcy Act, property of the appellant made available by her to her husband. Other declarations were made but they are not the subject of dispute.