Case: Australian Competition and Consumer Commission v Fox Symes &amp; Associates Pty Ltd [2005] FCA 1071
Outcome: cited
By paras 31, 32, 33 and 34, the Trustees plead these matters. 31. In the circumstances of the particulars pleaded in paragraphs 22 and 30 herein, it is reasonable to infer that: 31.1 Jefferson &amp; Stevenson, the DCT, the BSA and the Liquidator of Delvine were either creditors, contingent creditors or anticipated creditors for large sums of money and that inevitably there would come a time when these creditors would press Mr and Mrs Waters for payment of monies or obtain judgments that Mr and Mrs Waters would not be able to pay. 31.2 The 1997 Transactions and the 1999 Transaction amount to a voluntary disposition of the Property which contributed to Mr and Mrs Waters being left without sufficient assets to meet their debts. 32. Alternatively, the 1996 Transactions, the 1997 Transactions and the 1999 Transaction purport to have resulted in: (a) Donemate [as Trustee] being indebted to Dalvella [as Trustee] for the sum of $2,199,960; (b) Mr and Mrs Waters being indebted to Donemate [as Trustee] in the sum of $2,199,960; (c) Dalvella being granted a third party mortgage over the Property by Mr and Mrs Waters to secure Dalvella's loan to Donemate; and (d) Dalvella being entitled to take a transfer of Mr and Mrs Waters's legal and beneficial interest in the Property on the terms set out in the Contract. 33. In fact, the 1996 Transactions, the 1997 Transactions and the 1999 Transaction were manifested by circular transfers of funds between Mr and Mrs Waters's Account, Dalvella's Account and Donemate's Account which resulted in no consideration or consideration of less than market value being given, in that: 33.1 Dalvella [as Trustee] did not advance the sum of $2,199,960 to Mr and Mrs Waters; 33.2 Mr and Mrs Waters did not gift back the sum of $2,200,000 to Dalvella [as Trustee] ; 33.3 Dalvella [as Trustee] did not advance $2,199,960 to Donemate [as Trustee] ; 33.4 Donemate [as Trustee] did not advance the sum of $2,199,960 to Mr and Mrs Waters; 33.5 Mr and Mrs Waters did not repay the sum of $2,199,960 to Dalvella [as Trustee] ; 33.6 The mortgage granted by Mr and Mrs Waters to Dalvella was granted for no consideration because no monies were actually advanced by Dalvella [as Trustee] to Donemate [as Trustee] ; and 33.7 By virtue of the facts pleaded in paragraphs 33.1 to 33.6 herein, the Contract was not a genuine arms length contract. 34. By virtue of the matters pleaded in paragraphs 1 to 31 herein, the 1996 Transactions, the 1997 Transactions and the 1999 Transaction were dispositions pursuant to the provisions of section 121 of the Bankruptcy Act 1966 (Cth) and accordingly are void against the Applicants. 35 In the course of dealing with the challenge by Dalvella and Donemate to the adequacy of particulars given by the Trustees of the Statement of Claim, I set out extensively the elements of the pleading as then formulated. For the sake of completeness in these reasons, I have recorded the matters pleaded by the Trustees by the Amended Statement of Claim . It should be noted however that there is no change to the formulation of the 1996 transactions nor the pleaded particulars of those transactions. The Amended Statement of Claim introduces a new para 22.3 which pleads the main purpose of Waters in entering into the 1996 transactions. Paragraph 23.1 of the amended pleading adopts para 23 of the earlier pleading but also pleads that in the circumstances the facts pleaded in paras 20 to 22, the amount of the purported gifts by Waters to Dalvella ($2.2m) would probably have been available to creditors, but for the gifts. There is no change to the formulation of the 1997 transactions nor the 1999 transaction. The main purpose of the 1997 transactions and the 1999 transaction pleaded by para 30 of the Amended Statement of Claim is that pleaded by para 30 of the earlier pleading. There is no change to para 31. Paragraph 32 as previously formulated is now simply introduced by the word 'Alternatively'. Paragraphs 33 and 34 are in the same terms as the earlier pleading. 36 The contentions of Dalvella and Donemate are these. 51 Before dealing with each of these contentions, the case pleaded by the Trustees against Waters needs to be examined in the context of the pleading overall so as to test whether the Statement of Claim makes clear to Waters the case advanced against them which they must answer especially having regard to their contention that the 1996 transactions have no coherent relationship, within the pleading, with the 1997 and 1999 transactions in terms of remedial relief. The principles guiding the exercise of the discretion for the purposes of Order 11, r 16 are well settled ( Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572 ; (2000) 104 FCR 564 at 585-586 at [47] [51] per French J; Australian Competition and Consumer Commission v Fox Symes &amp; Associates Pty Ltd [2005] FCA 1071 at [92] to [109] per Lander J; BWK Elders Australia Pty Ltd v Westgate Wool Company Pty Ltd &amp; Ors (No. 2) [2002] FCA 87 at [2] , [3], [20] and [21] per Mansfield J; Pan Continental Mining Ltd v Posgold Investments Pty Ltd [1994] FCA 983 ; (1994) 121 ALR 405 at 414 per Beaumont J; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129 and 130, per Barwick CJ).