Camm v Linke Nominees Pty Ltd

REASONS FOR JUDGMENT 1 This proceeding has been referred to the Court by the Federal Magistrates Court. It involves a dispute between the applicants, who are the current trustees of the bankrupt estate of Mr Gary Camm, and Linke Nominees Pty Ltd ("Linke"). The dispute relates to the transfer of certain property owned by Mr Camm to Linke in 1995. 2 In their application the trustees seek a declaration that the transfer of the property from Mr Camm to Linke is void against them and an order that Mr Camm do all things necessary to transfer the property to them. The trustees contend that they are entitled to seek such a declaration and orders under s 121 of the Bankruptcy Act 1966 (Cth) ("the Act"). Linke disputes this contention. 3 The parties jointly submitted that two questions should be decided separately from and before all other questions in the proceeding. Those questions were: (a) Whether or not Messrs Lachlan McIntosh and John Park as the trustees of the second and subsequent bankrupt estate of Gary Stirling Camm have standing or are otherwise entitled to apply for orders pursuant to s 121 of the Act in respect of the property, subject of this proceeding, which property was acquired by or devolved on the bankrupt Gary Stirling Camm on a date prior to his first earlier bankruptcy. (b) If question (a) is answered yes, whether or not the rights and liabilities of the applicants and the respondent in this proceeding are governed by s 121 of the Act in terms of that section as applied prior to 16 December 1996 or in the terms of that section which has applied on or after 16 December 1996. 4 I agreed to the proposal because the questions on which the parties agreed were questions of law, the answers to which (I thought at the time) had the potential to determine the outcome of the proceeding and avoid the expense of a longer trial: see Orison Pty Ltd v Strategic Minerals Corporation NL (1987) 77 ALR 141 at 149-150. 5 The context in which the questions arise is provided by a statement of agreed facts. They are: 1. The property, the subject of this Application, is an estate in fee simple more particularly described as Lot 4, Registered Plan 36729, County of March, Parish of Weyba, Local Government: Sunshine Coast, being Title Reference 12489178 ("the subject property"). 2. Between 13 May 1988 and 27 February 1996, the bankrupt Gary Stirling Camm ("Camm") was the registered proprietor and later registered owner of the subject property under respectively the Real Property Acts of 1861 and 1877 (Qld-repealed) and the Land Title Act 1994 (Qld) 3. Camm was first made bankrupt by a Sequestration Order made on 29 November 1995. 4. Trevor John Shmierer was the Trustee of Mr Camm's first bankrupt estate. 5. [the parties agreed that, on 26 October 1995, Camm as vendor and Linke entered into a contract for the sale of the subject property although there was disagreement as to the legal consequences of them doing so] 6. That contract settled on 30 November 1995 being the day after that of the sequestration order in Camm's first bankruptcy. 7. Camm was discharged from his first bankruptcy on 27 February 1999. 8. Camm was made bankrupt a second time by a Sequestration Order made on 19 November 2003. 9. The Applicants, Mr Park and Mr McIntosh, are the trustees of Camm's second bankrupt estate. 6 The parties tendered an agreed bundle of documents. Linke also relied on an affidavit of Calvin Won Suk Chong which dealt with the issue of when Mr Schmierer's appointment as trustee came to an end (if it did). 7 Documents in the agreed bundle disclosed that the land was located at Noosa in Queensland. Mr Camm had been the registered proprietor since 1988. He had mortgaged the land to the Commonwealth Bank for about $500,000. The contract entered into between Mr Camm and Linke on 26 October 1995 was a conventional executory contract for the sale of land. It provided for the payment of a deposit of $1,000 by Linke with the balance of the purchase price of $400,000 payable on completion of the contract on 23 November 1995. The terms of the contract included a number of special conditions. Amongst them was a requirement that Mr Camm cause two writs to be removed from the title reference prior to the completion date. If the writs were not removed Linke could terminate the contract. Another special condition required that the consent of the Commonwealth Bank be obtained to Mr Camm entering into the contract and discharging the mortgage owed to it even though the money owing to the Bank by Mr Camm exceeded the purchase price provided for in the contract. Either party could terminate the contract if the Bank did not satisfy the requirements of the special condition. For some reason, which was not explained in evidence, settlement did not occur until 30 November 2005. No point was made relating to the week's delay and, I assume, it was agreed to between the parties. On the previous day Mr Schmierer had been appointed trustee of Mr Camm's bankruptcy estate. On that day - 29 November 1995 - Mr Schmierer wrote to Mr Camm's solicitors advising that he consented to the sale of the land proceeding at settlement on the following day. 8 Mr Schmierer was subsequently to report to creditors in the first bankruptcy that the property had been "realised by the Bank" and that the Bank had taken almost all of the proceeds of the sale. The land was sold for $400,000 of which sum the Commonwealth Bank received almost $393.000. The Bank became an unsecured creditor for a little over $119,000. 9 An instrument of transfer was prepared. It was signed by Mr Camm on 24 November 1995 and by Linke's solicitor on 30 November 1995. It was lodged in the Land Registry on 14 February 1996 and registered on 22 February 1996. 10 The trustees have foreshadowed that, at trial, they will allege that, notwithstanding the sale of the land to Linke in 1995, Mr Camm continued to reside there until 2007. The company had earlier sought to evict Mr Camm. Mr Camm resisted this attempt. In the course of so doing he swore an affidavit in which he deposed that, at the time of the sale, there was a side agreement between him and Linke under which, in addition to the nominated purchase price, he was to receive $150,000 from the company and he was granted an option to repurchase the land at a later date. This option was referred to in argument as "the warehousing arrangements." The alleged side agreement had not been disclosed to Mr Schmierer. The trustees also suggest that the property was deliberately undervalued at the time of sale and that Mr Camm retained an equitable interest in the property to the extent of the under value. 11 It will be convenient to deal first with question (b) because the parties are agreed as to the appropriate answer.

QUESTION (b) 12 Prior to 16 December 1996 s 121(1) of the Act provided: "(1) Subject to this section, a disposition of property, whether made before or after the commencement of this Act, with intent to defraud creditors, not being a disposition for valuable consideration in favour of a person who acted in good faith, is, if the person making the disposition subsequently becomes a bankrupt, void as against the trustee in the bankruptcy." 13 By operation of the Bankruptcy Legislation Amendment Act 1996 (Cth) ("the Amending Act") this version of s 121(1) was repealed and a new section was substituted. The substituted section commenced on 16 December 1996: see s 2(2) and s 3 of item 208 of sch 1. 14 Schedule 1 also contained a transitional provision which provided that the new s 121 applied to bankruptcies for which the date of the bankruptcy was on or after 16 December 1996: see sch 1, item 457. 15 The present section 121 has remained unaltered since its commencement in 1996. Insofar as it is relevant it provides: "121(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. (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. … (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) …" 16 Section 30 empowers the Court to grant declarations and mandatory orders to facilitate the avoidance of transfers in the circumstances prescribed by s 121. 17 The parties submit, and I accept that, by operation of the transitional provisions in items 208 and 457 of sch 1 of the Amending Act the position is that s 121, as set out above at [12] applied to Mr Camm's first bankruptcy and s 121 in its present form applies to his second bankruptcy. 18 As already noted, Mr Camm was made bankrupt, for a second time, by a sequestration order made on 19 November 2003. The present applicants were appointed as trustees of Mr Camm's second bankrupt estate. Accordingly, the parties submit that their rights and liabilities are governed, in this proceeding, by s 121 of the Act in its present form. The trustees' submissions proceeded on the basis that they could rely only on the extant version of the section.

QUESTION (a) 19 While the parties agree that s 121 in its present form applies they differ as to whether the transfer of the subject property to Linke can be held to be void against the trustees of Mr Camm's second bankrupt estate. 20 Question (a) fixes on a definite article: "The property, subject to this proceeding …". The parties were agreed that the "property" which is referred to in the question is Mr Camm's property interest in the land at Noosa. This is the property which is the subject of the declaration and consequential orders sought by the trustees in their application. 21 Although the question is cast in terms of "standing", in substance what is called for is a ruling on whether the trustees in Mr Camm's later bankruptcy are able to call s 121 of the Act in aid when seeking the relief sought in their application. If Mr Camm disposed of property (to use the former terminology) or transferred property (to use the current language of s 121) in circumstances which rendered the transaction void as against the trustees, they would, plainly, have standing to seek declarations or orders under s 30 of the Act to vindicate their rights.

The Legislation 22 In addition to s 121, there is another provision of the Act which is of central importance in answering Question (a). It is s 58. Another section was relied on in argument. It is s 59. On the view I take of the construction of s 121, it is not necessary to explore, in any detail, its interaction with s 59. In order to understand the submissions, however, it is necessary to set out parts of s 59. Insofar as they are relevant, ss 58 and 59 provided, at relevant times, as follows: "58(1) Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee. (2) Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with. (3) … (4) … (5) … (5A) …. (6) In this section, "after-acquired property", in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt. … 59(1) Where a person who is a bankrupt again becomes a bankrupt: (a) the property of the bankrupt: (i) that was acquired by, or devolved on, the bankrupt on or after the date of the earlier bankruptcy; and (ii) that had not been distributed amongst the creditors in the earlier bankruptcy before the date on which the person became a bankrupt on the later occasion; shall (subject to any disposition of that property made by the trustee in the earlier bankruptcy without knowledge of the presentation of the petition on, or by virtue of the presentation of which, the person became bankrupt on the later occasion and subject also to section 126) vest forthwith in the trustee in the later bankruptcy; (b) property: (i) that is acquired by, or devolves on, the bankrupt on or after the date of the later bankruptcy; and (ii) that is divisible amongst the creditors in the later bankruptcy; vests in the trustee in the later bankruptcy as soon as it is acquired by, or devolves on, the bankrupt; (c) the trustee in the earlier bankruptcy: (i) shall be deemed to be a creditor in the later bankruptcy in respect of … the debts proved in the earlier bankruptcy (whether or not those debts are entitled to priority, or are postponed, in the earlier bankruptcy); (ii) shall rank equally with the ordinary unsecured creditors in the later bankruptcy; and (iii) … (d) … (e) a transaction that, by virtue of sections 120, 121 or 122 is void as against the trustee in the earlier bankruptcy continues to be void as against that trustee. 23 "Property" is defined in s 5 of the Act to mean "real or personal property of every description … 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." The "property of the bankrupt", to which reference is made in s 58(1) and (2) is defined, in s 5, to mean "the property divisible among the bankrupt's creditors; and any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt …" By s 116(1) the property divisible amongst the creditors of a bankrupt includes all property that belonged to the bankrupt at the commencement of the bankruptcy or was acquired by the bankrupt after the commencement of the bankruptcy and before his or her discharge.

Submissions 24 Although the trustees accepted that the relevant "property" for the purposes of Question 1(a) was the legal interest in the land at Noosa, their submissions ranged more widely, picking up property interests which, they contended, devolved on Mr Camm as "after-acquired property" after he became bankrupt and during the currency of his first bankruptcy. These other property interests may or may not have ongoing relevance. I record the broader submissions, made on behalf of the trustees, for the sake of completeness. In doing so, however, I stress that the only "property" with which I am concerned in answering Question (a) is Mr Camm's interest (if any) at relevant times in the Noosa property. 25 The trustees contended that the only relevant property which formed part of Mr Camm's first bankrupt estate, which was vested in Mr Schmierer as his trustee on 29 November 1995, was Mr Camm's rights under the contract of sale which had been entered into on 26 October 1995. The legal rights did not pass at the earliest until settlement on 30 November 2005. The rights acquired by Mr Camm under the side agreement were not acquired by Mr Camm at least until 30 November 2005 because they were contingent on settlement of the contract for the sale of the land. By this time he was already bankrupt. The trustees claimed that the rights acquired by Mr Camm under the contract of sale, the side agreement and the equity he retained in the property to the extent of any under value constituted either after acquired property or property not claimed by Mr Schmierer. None of the property had been distributed amongst the creditors in the first bankruptcy before Mr Camm became a bankrupt for a second time. Accordingly, so it was submitted, all of this property vested in the applicants as trustees of Mr Camm's second bankrupt estate by operation of s 59(1) of the Act. 26 In oral argument senior counsel for the trustees submitted that, if the Noosa property had vested in Mr Schmierer, and the transfer which occurred on or after 30 November 1995 had been avoided under s 121 of the Act, there might well be a surplus in Mr Camm's estate which would be available to the trustees for the benefit of the creditors in Mr Camm's second bankruptcy. A surplus might exist if the present day value of the property substantially exceeded the sum for which Mr Camm was indebted at the time of his original bankruptcy. 27 Linke argued that s 59(1) operated in the case of discharged bankrupts and reserved the right of the original trustee to pursue the bankrupt in relation to assets which should have been, but were not, disclosed in the first bankruptcy to the exclusion of subsequent trustees. Alternatively it contended that "the trustee" referred to in s 121 of the Act is the original trustee, Mr Schmierer, and not the applicants. Linke, in its written submissions, identified the relevant transfer as being one effected by the contract. Had that transfer to Linke not occurred, the land would, it was argued, have vested in Mr Schmierer. Mr Camm's fee simple interest in the land, burdened by the mortgage to the Commonwealth Bank, could not have remained the property of Mr Camm such as to enable it to be vested in the trustees in a later bankruptcy. It could not, therefore, be said, under s 121(1)(b) of the Act, that, but for the transfer, the land "would probably have become part of the transferor's estate [in the second bankruptcy] or would probably have been available to creditors [in the second bankruptcy] if the property had not been transferred." 28 In reply, senior counsel for the trustees submitted that, if, as the trustees had argued, the relevant transfer occurred at settlement or upon registration, the position of the trustees became "entirely hopeless because there can be no doubt then that the person who transferred the interest in the property could only have been Mr Schmierer."

Consideration 29 The first question to be resolved is whether or not s 121 is available, in the circumstances, to avoid the transfer of Mr Camm's legal interest in the Noosa property to Linke. If, but only if, the answer to this question is "yes" will it become necessary to consider whether s 121 might be invoked by either or both of Mr Camm's trustees in his first and second bankruptcies. 30 Section 121(1) would render a relevant "transfer of property" by Mr Camm before he became a bankrupt void against the trustee in his bankruptcy. The former s 121 operated in the same manner. It dealt with "a disposition of property" by a person who "subsequently [became] bankrupt." The policy underlying antecedent transaction provisions such as s 121 of the Act was considered by the Law Reform Commission in its General Insolvency Inquiry. It explained the policy in these terms (Report number 45, Volume 1, paragraph 629): "Insolvency law has long adopted the policy of avoiding transactions by which an insolvent individual or company disposed of property within a relevant period prior to the actual commencement of the formal insolvency in circumstances that are unfair to the general body of unsecured creditors. This area of insolvency law, is consequently, retrospective in nature. Transactions by which property has been disposed of before the formal insolvency administration commenced may be reviewed. If the circumstances under which the transaction occurred and the effect of the transaction offended the policy of the law the transaction may be avoided (hence, the terminology 'avoidance of antecedent transactions')." (Emphasis added). The Commission recommended that "the broad policy evident in the existing legislative framework for dealing with the type of antecedent transactions under consideration should continue." (at paragraph 630). It was this report that led to the amendment of s 121 in 1996. 31 The contract entered into between Mr Camm and Linke on 26 October 1995 provided for the transfer of Mr Camm's legal interest in the Noosa property to Linke upon the payment, at settlement, of the balance of the purchase price by Linke. The settlement did not occur until after Mr Camm had become bankrupt. Even then the transfer of his legal interest was not perfected at least until the transfer had been lodged with the Land Registry. Section 121 will have no application unless it can be said that the entering into the contract of sale constituted a "transfer of property" for the purposes of s 121(1). If the "transfer of property" only occurred at the time of settlement or upon the lodgement of the instrument of transfer in the Land Registry, s 121(1) cannot operate because the only person who was legally able to act as transferor in respect of both these transactions was Mr Schmierer in whom the legal interest in the property vested, pursuant to s 58(1) of the Act, on 29 November 2005. This will be so whether "the trustee" referred to in s 121(1) is understood to be Mr Schmierer, as trustee in Mr Camm's first bankruptcy, or the trustees in his subsequent bankruptcy, or both. 32 The expression "transfer of property", as used in s 121(1) bears its ordinary meaning: see Peldan v Anderson (2006) 227 CLR 471 at 481. The ordinary and natural meaning of the word "transfer" in the context of s 121(1) is the conveying of a property right from one person to another as a result of an act performed by the transferor with the intention that the property would pass. 33 In Peldan v Anderson the High Court was concerned with a construction issue which involved the interaction of s 121(1)(a) and s 121(9)(b) of the Act. No issue arises on the facts of the present case as to whether there had been a transfer of property which did not previously exist. Nonetheless, in dealing with this issue the High Court plurality expressed views as to the proper construction of s 121(1)(a) which do bear on the issue currently under consideration. At 487-8 their Honours said that: "44 Where s 121(9)(b) is relied upon, the phrase "the property" in the opening words of s 121(1)(a) should be construed as signifying "the property in the hands of the transferor prior to the act which is taken to be the transfer". This removes from the operation of s 121(1)(a) the assumption that it is existing property which is being transferred. It involves treating the words "the property" in s 121(1)(a) in a special sense to give to s 121(1) an extended operation as required by s 121(9)(b). 45 The acceptable construction is best illustrated by setting out the paragraph as if it read in this manner: "(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 [in the hands of the transferor prior to the act taken to be the transfer] would probably have become part of the transferor's estate or would probably have been available to creditors if the property [in the hands of the transferee after the act taken to be the transfer] has not been [taken to have been] transferred …" (Bracketed words inserted). The italicised words are appropriate because it would be at odds with s 121(9)(b) for the subjunctive clause to read 'if the property in the hands of the transferor prior to the deemed transfer had not been deemed to be transferred'. Section 121(9)(b) expressly states that the property which is deemed to have been transferred is the "property that did not previously exist". 46 The effect of the acceptable construction is to shift the emphasis of the inquiry in s 121(1)(a), and to focus not upon whether the "transferred property" would have become part of the transferor's estate in bankruptcy, but upon whether that result would have obtained in respect of the transferor's "property" (as defined in s 5(1)) out of which the newly created property has been "carved"." 34 The words read into s 121(1)(a) of the Act direct attention to "the act taken to be the transfer" and require the identification of the property which had been in the hands of the transferor prior to that act being taken. It is, therefore, necessary to identify the relevant act and the time at which it occurred. 35 The process of conveying the title of the property from Mr Camm to Linke was governed by the Land Titles Act 1994 (Qld). By s 60(1) an interest in land may be transferred by registering an instrument of transfer of that land. The vendor's interest is transferred to the purchaser upon registration of the instrument of transfer: see s 62(1). The instrument of transfer is registered in the freehold land register: see s 158. An instrument is registered when the particulars are recorded in the register: see s 159. By s 160 it is provided that a registered instrument forms part of the register from when it is lodged. Section 166 provides that an instrument does not transfer an interest in land until it is registered. Section 167 provides that: "167 On registration of an instrument that is expressed to transfer …. an interest in a lot, the interest - (a) is transferred or created in accordance with the instrument; and (b) is registered; and (c) vests in the person identified in the instrument as the person entitled to the interest." (Emphasis added). 36 These provisions, collectively, create what Barwick CJ described in Breskvar v Wall (1971) 126 CLR 376 at 385 as "a system of title by registration." 37 In Peldan v Anderson the Court emphasised the significance of the registration process in the scheme provided for in the Land Title Act and equivalent Torrens title legislation in other States. The plurality said (at 480) that: "…the … property was land the title to which was provided by the Queensland Torrens title legislation, the Land Title Act. In such a case, the interests as joint tenants were extinguished by registration of a new instrument which created an indefeasible title as tenants in common. This is because, notwithstanding that the Land Title Act (like cognate statutes in other States) uses the language of 'transfer', title is comprised by the record contained in the register. A lot or an interest in a lot 'passes' by registration of an instrument (s 60). The title of the registered proprietor comes from the fact of registration, and it is this which is the source of the title …". See also Breskvar v Wall at 385-7, 400. 38 Prior to 26 October 1995 Mr Camm held the title to the Noosa land although the title was encumbered by the mortgage in favour of the Commonwealth Bank. Upon the contract of sale being entered into on 26 October 1995 Linke obtained an equitable estate or interest in the land but Mr Camm continued to hold the legal title. On 29 November 1995 Mr Camm retained his legal interest in the property. Upon his bankruptcy on that day that legal interest vested in Mr Schmierer by force of s 58(1) of the Act. Any subsequent transfer of that legal interest to Linke upon or following the settlement of the contract could only occur with Mr Schmierer's approval which was forthcoming. 39 Linke was bound, under the contract, to perform its terms by paying the balance of the purchase money and taking in return a transfer of the land. This occurred at settlement on 30 November 2005. It occurred with Mr Schmierer's approval. Most of the $400,000 purchase price was paid to the Commonwealth Bank in order to discharge part of the loan secured by the mortgage on the property. The balance was, presumably, used to pay the legal and other expenses associated with the sale to meet any necessary adjustments. 40 Mr Camm's fee simple interest in the Noosa property, which had vested in Mr Schmierer on 29 November 2005, was not transferred to Linke until the instrument of transfer was registered. This occurred on either the date of lodgement (14 February 2006) or the date of registration (22 February 2006) depending on how s 160 is construed. It is not necessary, for present purposes, to determine which of these two February dates was the date on which the fee simple interest in the land became vested in Linke. On either view the transfer of the land occurred after Mr Camm had become bankrupt. 41 The transfer of the property was not effected by the contract which was entered into between Mr Camm and Linke prior to Mr Camm's first bankruptcy. The terms of that contract were a matter for the parties and were not affected by the provisions of the Land Titles Act save to the extent that the parties agreed to terms which sought to ensure that a transfer of property rights would be effected pursuant to that Act: cf Barry v Heider (1914) 19 CLR 197 at 216 (per Isaacs J). The contract did not effect the transfer of Mr Camm's fee simple interest in the property. The only interest which passed from Mr Camm to Linke on the signing of the contract was an equitable interest which was "commensurate with the availability of specific performance" of the contract: see Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 333 (per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ); and, more generally, at 330-335. See also Black v Garnock (2007) 230 CLR 438 at 449-50. Strictly, however, as Professor Butt notes, "what is required is not so much the ability to obtain specific performance, properly so-called, but rather the ability to secure protection by any equitable remedy, including injunction. Only if equity would deny protection in this wider sense, is the purchaser denied the status of beneficial owner.": Butt, "Land Law" (6th Edition) at 120. The value of the purchaser's beneficial interest in the property is determined by calculating the percentage of the purchase price represented by the deposit paid under the contract: ibid. 42 At the time at which the Noosa property was transferred to Linke the property was vested in Mr Schmierer. It was not and could not be transferred to Linke by Mr Camm. In any event, it was transferred after Mr Camm became a bankrupt. Accordingly, in my opinion, s 121 cannot be invoked to avoid the transfer. 43 Some time was devoted during argument to a consideration of the decision of Dutney J in the Queensland Supreme Court in McIntosh v Linke Nominees Pty Ltd [2008] QSC 79. Some reference was also made to the decision of the Queensland Court of Appeal in McIntosh v Linke Nominees Pty Ltd [2008] QCA 275. This litigation arose out of an attempt by the trustees to enforce an agreement entered into by them and Linke and its principal shareholder. The agreement was entered into in the course of an examination of the principal shareholder of Linke which was being conducted under s 81 of the Act. In the course of the examination allegations had been made relating to the side agreement and sale of the property for less than its true value. The trustees had asserted that there was sufficient evidence about the side agreement to justify them commencing an action against Linke "to obtain orders pursuant to s 121 … that the transfer of the property to [Linke] be set aside." The agreement provided for certain payments to be made by Linke to the trustees in order that Linke might obtain unchallenged title to the property. The payments were not made and the trustee sued the company and its principal shareholder for specific performance of the obligations imposed by the agreement. 44 In this context both Dutney J and the Court of Appeal proceeded on the basis that s 121 was available to the trustees in respect of what they regarded as "after-acquired property" within the meaning of s 59(1) of the Act. 45 It does not appear from the reasons of the trial judge or those of the Court of Appeal that it had been argued that the transfer of the property had not occurred before Mr Camm had become bankrupt on the first occasion. The trial judge appears to have concluded that the property was after-acquired property for the purposes of s 59 because the transaction was voidable rather than being void and Mr Schmierer had not intervened to have it avoided. If the property were later recovered, his Honour reasoned that it would be after-acquired property available to the trustees by virtue of ss 59 and 116(1)(a) of the Act: see at [72]-[75]. In the Court of Appeal Muir JA (with whom Cullinane and Douglas JJ agreed) said no more (at [17]) than that the trustees were "left with their remedies against [Linke] under s 120 or s 121 of the [Act]." 46 For the reasons which I have already explained, I do not consider that s 121 of the Act could be relied on to avoid the transfer of the fee simple interest in the Noosa property to Linke. Furthermore, that interest did not constitute "after-acquired property" within the meaning of s 58 because it was not acquired by Mr Camm on or after the date on which he became bankrupt. He had acquired the interest in 1988. For the same reason his interest did not constitute property comprehended by s 59(1)(a) of the Act. It may be that some of Dutney J's references to property may include the benefits obtained by Mr Camm under the side agreement. These benefits did not devolve upon him until after his first bankruptcy. That property (if it exists) may well constitute after-acquired property.

CONCLUSION 47 Had it been necessary to answer Question (b) I would have answered it by recording that s 121 of the Act applied to Mr Camm's first bankruptcy in the terms in which it has appeared prior to 16 December 1996 and to his second bankruptcy in the terms in which it applied thereafter. 48 On one view the answer to Question (a) is: yes. There is no obstacle in the Act to the trustees making an application under s 121 of the Act. Whether or not such an application would or could be successful is another matter. While the application remains in its present form an application under s 121 in relation to the Noosa land would, for the reasons which I have given, be bound to fail. Were the application to be amended to cover property interests devolving on Mr Camm, after he first became bankrupt, as a result of the side agreement or sale for under value, s 121 may be available to the trustees depending upon how s 59 is construed. While, however, the property which is the subject of the proceeding is confined to Mr Camm's interest in the fee simple estate in the land at Noosa, these issues are not raised by Question (a). As a result I have difficulty in crafting an answer that will constitute a meaningful response to the question and be of assistance to the parties. It may be that the parties do not press for an answer having regard to the views I have formed as to the construction and potential application of s 121 of the Act. 49 I will hear the parties as to appropriate orders on a date to be fixed once they have had the opportunity of considering these reasons. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.