Commissioner of Taxation v Oswal

Division: General Division

National Practice Area: Commercial and Corporations

Sub-Area: Commercial Contracts, Banking, Finance and Insurance

Counsel for the Applicant: Mr NJ Williams SC, Mr DFC Thomas and Ms ME Ellicott

Solicitor for the Applicant: Australian Government Solicitors

Counsel for the First Respondents: Mr NC Hutley SC and Mr C Withers

Solicitor for the First Respondents: Kennedys (Australia) Pty Ltd

Counsel for the Second Respondent: Mr A Hochroth

Solicitor for the Second Respondent: Pikes & Verekers Lawyers

ORDERS WAD 264 of 2012 BETWEEN: COMMISSIONER OF TAXATION Applicant

AND: RADHIKA PANKAJ OSWAL First Respondent

JUDGE: GILMOUR J DATE OF ORDER: 29 JUNE 2016

1. The mortgage registered in favour of the second respondent over the property known as 2 Bay View Terrace, Peppermint Grove, being Lot 90 on Deposited Plan 56827, Certificate of Title Volume 2668 Folio 1000, is void pursuant to section 89 of the Property Law Act 1969 (WA).
2. The mortgage registered in favour of the second respondent over the property known as 72 Philip Road, Dalkeith, being Lot 318 on Plan 2688, Certificate of Title Volume 732 Folio 95, is void pursuant to section 89 of the Property Law Act 1969 (WA).

THE COURT ORDERS THAT:

1. The applicant have liberty to apply within 14 days of this order, on due notice to the respondents, for any consequential relief including as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GILMOUR J: 1 The Commissioner of Taxation seeks declarations that mortgages granted by the first respondent, Mrs Radhika Pankaj Oswal, over two very valuable residential properties located in suburban Perth, Western Australia, in favour of the second respondent, Mercury Services Limited, are void pursuant to s 89(1) of the Property Law Act 1969 (WA) (PLA) as being an alienation of property with intent to defraud her creditors. The two mortgages were granted by one mortgage document (L517813M) which purports on its face to have been executed on 24 December 2010 and which I will refer to as the Mortgage. 2 A threshold argument is advanced by both respondents that, as the Mortgage is registered under the Transfer of Land Act 1893 (WA) (TLA), Mercury's interest, as mortgagee, is indefeasible by reason of s 68(1) of that Act and cannot be impugned by operation of s 89 of the PLA. 3 Should that argument fail, Mrs Oswal's defence is that the requisite intent under s 89 of the PLA has not been made out. Each respondent also contends that the provision in s 89(3) of the PLA is not a defence in respect of which they carry the onus of proof, but rather it is for the Commissioner to prove that the Mortgage did not fall within the reach of that provision. 4 I have concluded, for the reasons which follow, that there should be judgment for the Commissioner.

Factual background 5 The following background facts, unless indicated, are not controversial. Mrs Oswal 6 At all times since 17 November 2006, Mrs Oswal has been the registered proprietor of the property known as 72 Philip Road, Dalkeith, being Lot 318 on Plan 2688, Certificate of Title Volume 732 Folio 95. 7 At all times since 17 October 2007, Mrs Oswal has been the registered proprietor of the property known as 2 Bay View Terrace, Peppermint Grove, being Lot 90 on Deposited Plan 56827, Certificate of Title Volume 2668 Folio 1000. 8 I will refer to the two properties collectively as the Properties. 9 At all relevant times until January 2012, Mrs Oswal was the owner of 35% of the issued shared in Burrup Holdings Limited, now known as Yara Pilbara Holdings Pty Ltd. Mr Oswal 10 At all relevant times until January 2012, Mr Oswal was a director of Burrup Holdings Limited and of Burrup Fertilisers Pty Limited, now known as Yara Pilbara Fertilisers Pty Ltd). 11 I will, for contextual purposes, refer to these companies by their former names abbreviated to Burrup Holdings and Burrup Fertilisers, respectively. 12 Burrup Fertilisers owns and operates an ammonia production facility on the Burrup Peninsula near Karratha, Western Australia. Burrup Holdings is the owner of all the issued shares in Burrup Fertilisers. 13 At all relevant times until January 2012, Mr Oswal was the owner of 30% of the issued shares in Burrup Holdings. Mercury 14 Mercury is a Dubai-registered company which has, as one of its addresses, an apartment in the same building in Dubai in which Mrs Oswal maintains a residence. Mrs Oswal's brother, Mr Raghau Gupta, is the sole shareholder in Mercury and one of its three directors. The Mrs Oswal ANZ securities 15 At the time of execution of the Mortgage, Mrs Oswal had executed the following securities in favour of Australian and New Zealand Banking Group Limited (ANZ): (a) a share mortgage dated 23 December 2009 pursuant to which Mrs Oswal mortgaged to the ANZ the greater of: (i) 82,503,106.5 shares in Burrup Holdings registered in Mrs Oswal's name in her personal capacity from time to time; and (ii) 7.5% of the total issued share capital in Burrup Holdings registered in Mrs Oswal's name in her personal capacity from time to time; (b) an Escrow Process Deed, Escrow Agreement and Power of Attorney all dated 1 February 2010, which governed Mrs Oswal's dealings with the balance (27.5%) of her shares in Burrup Holdings; and (c) a personal guarantee to the extent of US$568 million (together, the Mrs Oswal ANZ securities) 16 A suite of securities had also been granted by Mr Oswal in favour of ANZ, including: (a) a share mortgage dated 23 December 2009, pursuant to which Mr Oswal mortgaged to the ANZ all of his shares in Burrup Holdings; and (b) a personal guarantee to the extent of $US928 million. 17 In addition, Burrup Holdings mortgaged the shares held by it in Burrup Fertilisers to ANZ and granted ANZ a fixed and floating charge over all the assets, rights and undertakings of Burrup Fertilisers. 18 Mrs Oswal has brought separate proceedings in the Supreme Court of Victoria (the Duress Proceeding), seeking to have the Mrs Oswal ANZ securities set aside or declared void on the bases that they were procured by the duress, undue influence or coercion of ANZ, or by misleading conduct, or that they were illegal. 19 The Commissioner, for the purposes only of this proceeding, has agreed to accept that at all material times the Mrs Oswal ANZ Securities were of no force or effect and that accordingly the ANZ was not at any material time a creditor of Mrs Oswal. 20 Notwithstanding the Duress Proceeding, Mrs Oswal has conceded that, at the time of execution of the Mortgage, she believed: (a) she was indebted to ANZ; (b) ANZ was a present creditor of hers by reason of the Mrs Oswal ANZ Securities; and (c) the Mrs Oswal ANZ securities were enforceable by ANZ against her.

Preliminary risk review by Commissioner, audit of Mr Oswal and failure by Mrs Oswal to file a tax return 21 By letter to Mr Oswal c/- his tax agent M. Squared and Associates Pty Ltd dated 30 January 2009, the Commissioner informed him that he had conducted a preliminary risk review of his income tax affairs and those of his controlled entities for the income years ended 2006 and 2007. The letter also noted that it required the immediate lodgement of "outstanding tax returns" of Mrs Oswal for the years ended 30 June 2007 and 2008, and for the Burrup Trust for the years ended 30 June 2006, 2007 and 2008. 22 Mr Raj Jeyarajah, Director of Finance at Burrup Fertilisers, wrote by email dated 3 February 2009 to Mr Peter Moltoni, a Director of M. Squared and Associates, in effect, concerning the Commissioner's letter of 30 January 2009. His email enquired, amongst other things, as to the status of work done for "RO", which I infer are the initials of Mrs Oswal. 23 Mr Moltoni replied by email later that day stating that his company had never lodged tax returns for Mrs Oswal as they had been advised that she did not have any income. 24 Shortly after this, by email dated 9 February 2009, Mr Devlin Elliot, an accountant with M. Squared and Associates Pty Ltd, wrote to Mr Jeyarajah, requesting details of Mrs Oswal's tax file number so that he could prepare the "return not necessary" forms for 2007 and 2008 for her. I infer from this that M. Squared and Associates Pty Ltd had concluded that it was unnecessary for Mrs Oswal to lodge tax returns for those two years. 25 It is common ground, as between the Commissioner and Mrs Oswal, that Mrs Oswal received the services of the same tax agent as Mr Oswal and the Burrup Trust and that at the time the Mortgage was executed, Mrs Oswal had not lodged a tax return for the 2007 or 2010 income years. ANZ Demands 26 On or about 3 December 2010, ANZ made demands of US $529,196,275 on each of Mr and Mrs Oswal pursuant to the personal guarantees executed by them.

Mr and Mrs Oswal depart Australia 27 On 13 December 2010, Mr and Mrs Oswal left Australia and, as I will explain later, they each chose not to come to Australia to give evidence in this case. 28 Subsequently, Mr and Mrs Oswal established a residence at Building 99 Jebel Ali, Dubai, United Arab Emirates. However, Mrs Oswal pleads in her defence that she does not currently live there. Receivers appointed by ANZ 29 On 16 December 2010, ANZ appointed receivers over Mrs Oswal's shares in Burrup Holdings. 30 On 17 December 2010, ANZ appointed receivers to all the assets and undertakings of Burrup Fertilisers and Burrup Holding's shares in Burrup Fertilisers. Mortgage executed 31 Sometime before 24 December 2010, Mrs Oswal executed the Mortgage over each of the Properties. The Mortgage was not dated by Mrs Oswal and was signed by her in the absence of a witness at a time when she was overseas. There is in evidence a copy of the Mortgage executed by her but with the date section and attestation section left blank. Thereafter Mrs Oswal's signature was "witnessed" by a person called Ramesh Sodum disclosing an address in the Perth suburb of Nedlands. An immigration search disclosed that Ramesh Sodum was in Australia between 12 November 2010 and 25 December 2010, at which time he departed Australia and then returned on 16 January 2011. 32 At the time the Mortgage was registered on 24 December 2010, each of the Properties was otherwise unencumbered. Assessments issued to Mrs Oswal 33 On 22 February 2011, the Commissioner issued notices of assessment to Mrs Oswal for each of the income years ended 30 June 2007 and 30 June 2010 for income tax, administrative penalties and general interest charges in the total amount of $178,210,810 (tax-related liabilities). 34 At the time the notices of assessment were issued on 22 February 2011, Mrs Oswal had still not lodged an income tax return for either the 2007 or 2010 tax years. 35 On 29 March 2011, a Deputy Commissioner of Taxation, authorized by s 255-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth), commenced proceedings in this Court [(P) WAD 95/2011] to recover the tax-related liabilities and additional general interest charge which had accrued, and on 9 August 2011 obtained judgment against Mrs Oswal in the amount of $186,321,790,11.

Section 89 Property Law Act 1969 (WA) 36 Section 89 of the PLA provides: Except as provided in this section, every alienation of property made, whether before or after the coming into operation of this Act, with intent to defraud creditors is voidable, at the instance of any person thereby prejudiced. This section does not affect the law of bankruptcy for the time being in force. This section does not extend to any estate or interest in property alienated for valuable consideration and in good faith or upon good consideration and in good faith to any person not having, at the time of the alienation, notice of the intent to defraud creditors. 37 Section 89 replaced, in Western Australia, the statute 13 Eliz 1 c 5, the Fraudulent Conveyances Act 1571, entitled "An Act against Fraudulent Deeds, Gifts, Alienations, etc" (the Elizabethan Statute). The Elizabethan Statute provided that transfer of property for the purpose of defrauding creditors was to be "clearly and utterly void, frustrate and of none [e]ffect" and provided that the statute did not extend to transfers of property to a bona fide purchaser for value without notice. 38 The Elizabethan Statute was replaced by s 172 of the Law of Property Act 1925 (UK). This has been subsequently replaced by ss 423 - 425 of the Insolvency Act 1986 (UK). Provisions equivalent to s 172 have been enacted in all Australian States, the Australian Capital Territory, the Northern Territory and New Zealand: Conveyancing Act 1919 (NSW) s 37A; Property Law Act 1958 (Vic) s 172; Law of Property Act 1936 (SA) s 86; Property Law Act 1974 (Qld) s 228; Conveyancing and Law of Property Act 1884 (Tas) s 40; Civil Law (Property) Act 2006 (ACT) s 239; Law of Property Act 2000 (NT) s 208; Property Law Act 2007 (NZ) ss 344 - 350. Further, prior to its amendment by the Bankruptcy Legislation Amendment Act 1996 (Cth), s 121 of the Bankruptcy Act 1966 (Cth) was also in similar terms, providing that a disposition of property "made with intent to defraud creditors" by a bankrupt previously to his or her bankruptcy was voidable.

Section 68(1) Transfer of Land Act 1893 (WA) 39 Section 68(1) TLA provides: 68(1) Notwithstanding the existence in any other person of any estate or interest whether derived by grant or transfer of the fee simple from the Crown or otherwise which but for this Act might be held to be paramount or to have priority the proprietor of land or of any estate or interest in land under the operation of this Act shall except in case of fraud hold the same subject to such encumbrances as may be notified on the registered certificate of title for the land; but absolutely free from all other encumbrances whatsoever except the estate or interest of a proprietor claiming the same land under a prior registered certificate of title and except as regards any portion of land that may by wrong description of parcels or boundaries be included in the certificate of title or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser.

Are s 89(1) PLA and s 68(1) TLA inconsistent? 40 Mercury submits that s 89(1) of the PLA conflicts with s 68(1) of the TLA and that the provisions of the TLA prevail over those of the PLA. It submits that prima facie its title to the security interest in each of the Properties is paramount and cannot be disturbed by the operation of s 89 of the PLA. 41 The submission as to the primacy of the TLA is sourced in the provisions of s 6 of the PLA and s 3(1) of the TLA. These provide relevantly: PLA s 6(1): Except as in this Act expressly provided, this Act so far as inconsistent with the Transfer of Land Act 1893,… does not apply to land that is under (the TLA). TLA s 3(1): All … Acts … so far as inconsistent with this Act shall not apply … to land under the operation of this Act. 42 Accordingly, the question is whether s 89(1) of the PLA is inconsistent with s 68(1) of the TLA. In my opinion it is not. 43 The Supreme Court of New Zealand considered this question concerning provisions to like effect (s 60 Property Law Act 1952 (NZ) and s 62 Land Transfer Act 1952 (NZ)): Regal Castings Ltd v Lightbody [2009] 2 NZLR 433. 44 The Court, by majority, held that the indefeasibility provisions of the Torrens system allowed for the enforcement against the registered proprietor, of in personam remedies given by the Elizabethan Statute and its successors. This was referred to with approval by the plurality in Marcolongo v Chen [2011] 242 CLR 546 at [21]. Moreover, as their honours there also observed, this view had earlier been accepted by Hogg, The Australian Torrens System (1905), p 835 and Kerr, The Prinicples of the Australian Lands Titles (Torrens) System (1927) p 223. There, the High Court was considering an analogous provision in s 37A of the Conveyancing Act 1919 (NSW) and restored the judgment of the primary Judge, declaring void a contract of sale of land which had been completed and the transfer registered. The High Court did not make any finding of fraud for the purposes of the application of the NSW indefeasibility provisions. 45 Indeed, in Regal Castings at [17], Elias CJ, in concluding that no inconsistency arose, said: "Does the application of s 60 of the Property Law Act 1952 conflict with the provisions of the Land Transfer Act? I do not think that it does, for reasons that turn on the nature and effect of an application by a creditor under s 60 to set aside a transaction. … 46 Her Honour then stated at [21]: An application under s 60 to set aside an alienation of property is not a claim in rem. It does not assert "encumbrances, liens, estates, or interest", such as would amount to an attack on the title obtained through registration contrary to s 62 of the Land Transfer Act. It is not properly described as an "action for possession, or other action for the recovery of any land", such as would be in conflict with s 63(1). Nor is it an application to the court attacking the registered title under the fraud exception contained in s 63(1)(c). An application for remedy under s 60 of the Property Law Act 1952 in respect of the conveyance of Land Transfer land with intent to defraud creditors does not assert defect in title. The principles of indefeasibility, in protection of the title created by registration, are not engaged by the statutory remedy under s 60 by which the registered proprietors can be compelled to provide satisfaction to the creditors, including by reconveyance of the property, declaration of trust in respect of it, or appointment of receivers for it. These remedies are granted against the registered proprietors personally. 47 Blanchard and Wilson JJ were of the same opinion: Regal Castings at [77]-[78]. 48 In the present case, the Commissioner, in his action under s 89(1) of the PLA, does not seek to impugn the Mortgage by advancing some competing estate or interest. There is no assertion of an estate or interest challenging the paramountcy or priority of the registered Mortgage. Rather, the Commissioner is seeking statutory relief under s 89(1) of the PLA as a person prejudiced by the execution of the Mortgage. 49 Hodgson CJ in Silvera v Savic (1999) 46 NSWLR 124, at [62], held that it was "clear" that the indefeasibility provisions did not protect a disponee who shared the disponor's intention to hinder or delay creditors from liability under the equivalent of s 89 (s 37A of the Conveyancing Act 1919 (NSW)). Later, in Green v Schneller [2002] NSWSC 671, Barrett J at [101] was prepared to make a declaration that a registered transfer of Torrens system land by a debtor wife to her husband was voidable under s 37A. 50 Black J in Moustach Pty Ltd v Takehi [2015] NSWSC 1013, albeit in the context of a pleading summons, considered at [14] the interaction between s 37A of the Conveyancing Act 1919 (NSW) and s 42 of the Real Property Act 1900 (NSW), the latter of which is the equivalent of s 68 of the TLA. The relevant defendant in that case had submitted, in impugning the proposed statement of claim, that fraud required to be pleaded under s 42 of the Real Property Act 1900 (NSW) in order to overcome the indefeasibility provisions as a predicate to a successful claim under s 37A of the Conveyancing Act (NSW), in circumstances where the interest which had been alienated had been registered. 51 His Honour observed in Moustach at [15], that if the proposition contended for by the defendant in that case were correct, then s 37A(3) would seem to be superfluous as occasion would rarely, if ever, arise, at least in the case of dealing with a registered real property interest, for a defendant to seek to establish the defence under s 37A(3), of a purchase in good faith or the lack of notice of the intent to defraud creditors. This is because a plaintiff would first have had to establish that the transferee was fraudulent for the purpose of s 42 of the Real Property Act 1900 (NSW), in order to succeed against him, excluding any possibility that the defence might be established. His Honour was not required to come to any concluded view, although he declined to grant summary dismissal upon the argument presented. Nonetheless, his Honour's reasoning exposes one significant difficulty with Mercury's contentions. 52 The grant of in personam relief under s 89 of the PLA against registered proprietors is also consistent with authority concerning analogous Commonwealth statutory provisions. McKerracher J, for example, in Verge v Devere Holdings Pty Ltd (No 4) [2010] FCA 653 at [354], held that the right established by s 120 of the Bankruptcy Act 1966 (Cth) was "unaffected by the indefeasibility provisions". Section 120 differs to some extent from s 89, but not so as to affect the reasoning concerning the question of relief against a registered proprietor of an interest in land. 53 The availability of in personam relief has been long recognised. In a New Zealand case, Frazer v Walker [1967] 1 AC 569 at 585, the Privy Council held that provisions conferring indefeasibility of title "in no way denies the right of a plaintiff to bring against a registered proprietor a claim in personam, founded in law and equity, for such relief as a court acting in personam may grant. That this is so has frequently, and rightly, been recognised in the courts of New Zealand and of Australia". 54 The Privy Council's decision has been adopted on numerous occasions by the High Court of Australia as declaratory of the law in Australia. In Breskvar v Wall (1971) 126 CLR 376, Barwick CJ reconciled the existence of such "exceptions" to indefeasibility with the purpose of the Torrens legislation at 385 as follows: "The stated exceptions to the prohibition on actions for recovery of land against a registered proprietor do not mean that that "indefeasibility" is not effective. It is really no impairment of the conclusiveness of the register that the proprietor remains liable to one of the excepted actions any more than his liability for "personal equities" derogates from that conclusiveness. So long as the certificate is unamended it is conclusive and of course when amended it is conclusive of the new particulars it contains." 55 Mercury submitted that a s 89 PLA claim should not be regarded as within the ambit of the in personam exception to indefeasibility or alternatively that to permit this is to introduce "by the back door a means of undermining the doctrine of indefeasibility which the Torrens system establishes" citing in aid Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [193]; Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 at 156-7; LHK Nominees Pty Ltd v Kenworthy (2002) 26 WAR 517; [2002] WASCA 291 at [186], [210], [273]-[299]. The premise of this submission is misconceived. Section 89 is not an exception to the indefeasibility of title conferred by the TLA. The statutory remedy does not seek to impugn the title to property but rather to render voidable an alienation of property, made with the intent to defraud the disponors creditors. The alienation of the Properties with the relevant intent was by means of the grant of the Mortgage. It is this which gives rise to the statutory relief claimed and which operates in personam. 56 This, it seems to me, is what Barwick CJ was explaining in the above passage from Breskvar v Wall. To like effect is what Elias CJ said at [21] in Regal Castings set out earlier that "(t)he principles of indefeasibility…. are not engaged by the statutory remedy ….". 57 Moreover, the authorities cited are not to the point. The passage from Farah Constructions at [193], for example, refuted the proposition that the acquisition by a mortgagee, in that capacity, of a proprietary interest following registration of a forged instrument in respect of property that is subject to a trust amounts to a knowing receipt by the mortgagee of trust property rendering the mortgagee as a constructive trustee of trust property. That is not this case. Indeed Farah Constructions and the other cases referred to by Mercury expressly acknowledge that, despite the indefeasibility provisions in the relevant legislation, certain legal or equitable causes of action, operating in personam are still available as against the registered proprietor. This, as I have already observed, is of long standing authority: eg. Barry v Heider (1914) 19 CLR 197 at 213; Frazer v Walker at 585. This extends to the statutory remedy provided by s 89(1) PLA. 58 I conclude, for these reasons, that there is no inconsistency as between s 89(1) of the PLA and s 68(1) of the TLA. 59 I will now turn to the claim under s 89 of the PLA.

Section 89 PLA claim 60 That the Mortgage was an alienation of property and that the Commissioner was thereby prejudiced are not put in issue. Rather, the issues are whether Mrs Oswal, in granting the Mortgage, did so with intent to defraud her creditors, and whether it was necessary for the Commissioner to prove, for the purpose of s 89(3) of the PLA, that the Mortgage was not granted for valuable or good consideration and was not granted in good faith. I will deal with these in turn.

Intention to defraud creditors applicable principles 61 The leading authority in Australia on the modern iterations of the Elizabethan Statute is Marcolongo. This case considered s 37A of the Conveyancing Act 1919 (NSW), which is relevantly an analogue for s 89 of the PLA. 62 The following principles emerge from the plurality judgment. The expression "intent to defraud creditors" in s 89(1) refers to an intention to hinder or delay creditors: Marcolongo at [12], [19], [22] - [23] and [28]. The intention required by the statute is an actual intention, but ordinarily the existence of that fact will be inferred: Marcolongo at [26]; Petrovic v Brett Grimley Sales Pty Ltd [2014] VSCA 99 at [27]; Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) (2008) 39 WAR 1 at [9105]. The determination of whether that intent existed requires a consideration of all relevant circumstances: Williams v Lloyd; In re Williams (1934) 50 CLR 341 at 372; Cannane v J Cannane Pty Ltd (1998) 192 CLR 557 at [12] per Brennan CJ and McHugh J, [92(4)] per Kirby J. 63 It is not necessary to prove "the actual content of the relevant person's mind": Puglia v Basol [2005] NSWSC 1271 at [12]. Proof of an intention to hinder or delay creditors of itself establishes relevant dishonesty. Accordingly, an intention to hinder or delay creditors is the relevant species of fraud: Marcolongo at [29]-[33] and [56]. In addition, it is not necessary to show that a disponor wanted creditors to suffer a loss, that the disponor had a purpose of causing loss or that the disponor had an "awareness that the transaction would have an effect on the ability of [his or her] creditors to recover": Marcolongo at [28], [31]-[32]. The intention to hinder or delay creditors need not be the sole, or even the predominant or primary purpose of the conveyance or assignment, and it does not matter if the relevant intention was formed because of, or at the instigation of, another. 64 However, where, as here, all of the facts concerning a disposition are within the knowledge of the disponor and the disponee, "a very slight degree of proof should be sufficient to shift that burden" to the disponor: Andrew (as trustee for the estate of Ward (dec'd)) v Zant Pty Ltd (rec and mgr apptd) [2004] FCA 1716 at [20] and [110], citing authority including Michael v Thompson (1894) 20 VLR 548 at 522. I apprehend Hill J in Andrew to have been referring to the shifting of an evidentiary burden not the ultimate burden of proof. This principle was also acknowledged in Westpac v Bell Group (No 3) (2012) 44 WAR 1 at [513] referring to a decision of a Full Court of this Court in PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at [527]-[528]. 65 I do not accept the submissions put on behalf of Mrs Oswal that Michael v Thompson is no longer good law having regard to the decision in Briginshaw v Briginshaw (1938) 60 CLR 336. It was well established before 1938, indeed before Michael v Thompson was decided, that fraud required to be proved clearly, unequivocally, strictly, or with certainty, as Dixon J observed in Briginshaw at p 362. 66 There are various circumstances in which it is recognised that the Court will move readily to infer the existence of the requisite intention. These include where: (1) the "natural and probable consequences" of the disposition is the defeat or delay of creditors: Freeman v Pope (1870) 5 Ch App 538 at 541; Marcolongo at [24]; Bell Group Ltd (in liq) at [9146]; (2) the alienation is made voluntarily: Lloyds Bank Ltd v Marcan [1973] 1 WLR 1387 at 1390-1 per Russell LJ, referred to with approval by the plurality in Marcolongo at [32]; Marcolongo at [25]; (3) the alienation is made, relevantly, for no consideration by a person in financial difficulties: Cannane at [13]; (4) the alienation is made in favour of a family member: Noakes v J Harvy Holmes & Son (1979) 37 FLR 5 at 10; Cannane at [92(4)] per Kirby J; and (5) the alienation is made in haste or proximately to one or more events indicating financial stress on the part of the disponor: PT Garuda 35 FCR 515 at 525 and 527; Marcolongo at [46], [80], [83], [84]; and Green v Schneller at [86]. 67 Each of these circumstances is engaged in the present case. They are individually and together relevant to the factual inquiry as to Mrs Oswal's intent in granting the Mortgage. 68 As the Commissioner submits, correctly, the word "creditors" in s 89(1) does not refer to any one or more particular creditors of a defendant at the time the impugned alienation occurred. Rather, "creditors" includes present and future creditors, whether individually or collectively: Cannane at 566, 574; Barton v Deputy Federal Commissioner of Taxation (1974) 131 CLR 370 at 374; Chen v Marcolongo (2009) 260 ALR 353 at [180]. As Young JA noted in Chen at [180] in a passage not doubted by the High Court on appeal and agreed with by the other members of the New South Wales Court of Appeal: "The word "creditors" in the section has been held on more than one occasion to mean present or future creditors, so that if a person fears that his or her activities may generate creditors and puts property out of the reach of such possible persons, the transfer of the property can be attacked under the section." 69 Illustrative of this, in Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278 at [32], the Court accepted that the Commissioner was a "creditor" for the purposes of s 121 of the Bankruptcy Act 1966 (Cth) in respect of impugned transactions occurring in August 1987. This conclusion was reached notwithstanding that notices of assessment were not issued by the Commissioner to the defendant until 2000 and those assessments related to years postdating August 1987 (being the 1992 to 1999 income years). 70 Senior counsel for Mrs Oswal, in closing oral submissions eschewed, correctly, any requirement, for the purpose of s 89(1), that the Commissioner identify particular creditors.

Consideration of issue of Mrs Oswal's intention 71 I reject the submissions that the suit must fail because there is no evidence that Mrs Oswal was aware of the existence of any creditors or potential creditors at the time she executed the Mortgage, nor evidence that she was aware of any potential liability to the Commissioner. Proof of such knowledge is not, in my opinion, necessary to obtain relief under s 89(1). Indeed it is not necessary to prove the existence of any creditor or that there will be creditors in the future. 72 The thrust of the submission on behalf of Mrs Oswal, as to her intent, was that the only inference the Court could properly draw in all the circumstances, if it was so minded, was an intent by her to defraud the ANZ, although it was put that the evidence did not warrant even that conclusion. Whilst Mrs Oswal believed the ANZ was her creditor and that the Mrs Oswal ANZ Securities were enforceable against her, in fact, as agreed for the purposes only of this case, the ANZ was not a creditor and those securities were not enforceable. It was then submitted that because there was no evidence that she was in business in Australia, nor that she had creditors, that the relevant finding of intent was not open. 73 I reject these submissions. I find, for reasons I will now explain, that Mrs Oswal intended to defraud not merely the ANZ but her creditors generally, whether present or future. The fact, agreed for the purposes only of this case, that the ANZ was not actually a creditor does not denude her intent, so far as concerned her creditors, of operative force for the purposes of s 89(1) PLA. Her intention is not to be viewed by reference merely to the ANZ in isolation from the question of creditors generally. Section 89(1) is concerned with "creditors". Her intent to defraud the ANZ which she believed was a creditor is a relevant fact to consideration of her intent generally as to her creditors, existing and future. 74 The conclusion I have reached in relation to Mrs Oswal's relevant intent is by inference from other proved facts. I have not chosen between conflicting inferences with equal degrees of probability. I have inferred what was Mrs Oswal's intention with a high degree of probability emerging from the evidence as a whole. 75 This is a case, par excellence, where amongst other relevant factors the rational and probable consequences of the alienation was to delay, hinder or defraud creditors. The evidence to which I will now turn warrants such a conclusion and so far as concerns her intention was certainly sufficient to shift the evidentiary burden to Mrs Oswal to dispel it. She did not give evidence. 76 The backdrop to her executing the Mortgage, as Mrs Oswal ultimately asserted, concerns a promissory note which her husband entered into with Mercury on 8 January 2009, (the Promissory Note). It was executed by Mr Oswal and witnessed by the placement of Mercury's company seal, attested to by Mr Naveen Arora. Its terms set out a loan of US$ 45 million made to Mr Oswal, as borrower, with interest at the rate of 10% per annum. Clause 7 provides that Mr Oswal agreed to provide as security for the loan a mortgage over the Properties, and that the "[m]ortgage will be procured and facilitated by the Borrower in favour of lender as and when demanded by the lender or immediately, in the cause of default as per clause 8". Clause 8 includes terms that there would be an event of default if "any person takes any action or any legal procedure is commenced or other steps taken against Borrower in relation to his business" (clause 8.3) or "[a] distress or other execution is levied or enforced or sued out upon or against any property of the Borrower'' (clause 8.5). 77 It is contended for Mrs Oswal that it is open to the Court to infer that she agreed to provide the Mortgage because her husband, by clause 7 of the Promissory Note, had agreed with Mercury that such mortgages would be provided if an event of default occurred. An event of default under clause 8 occurred when the ANZ made demands on Mr Oswal on 3 December 2010. 78 This is a somewhat different contention to that pleaded at [14] and [17(b)] of her further amended defence. There, it is not asserted that she agreed to provide the Mortgage because her husband had agreed with Mercury that mortgages over the Properties would be provided if an event of default occurred. Rather the pleading, relevantly, was that she agreed with her husband, prior to the Promissory Note being executed, that she would provide such mortgages if this was necessary to secure the loan of funds that were required for use by Burrup Holdings and general corporate purposes. It is also pleaded that she agreed to her husband entering into the Promissory Note. 79 Despite the terms of the Promissory Note there was no evidence of any loans made by Mercury to Mr Oswal. Indeed, in its defence at [11(c)], Mercury pleads that it advanced, pursuant to the Promissiory Note, approximately US $45 million to a number of entities associated with Mrs Oswal and/or Mr Oswal. 80 Mrs Oswal, in her further amended defence at [14(c)], also pleads that Mercury, pursuant to the Promissory Note, advanced US $45 million to a number of entities associated with Mrs Oswal and/or Mr Oswal. 81 Each of these pleadings asserts, in effect, that the Promissory Note was executed prior to the loan funds being advanced. 82 Various documents relied upon by Mercury as evidence of loan funds made to these entities all post-date the date of the Promissory Note. 83 However, the Promissory Note is in terms that the promise to pay is given "(for) value received", that is, the Promissory Note was given after the loan funds had been advanced. 84 There was evidence of transfer of monies made by Mercury to certain "entities" in Australia. Mrs Oswal, it seems, may have been a shareholder in two of these: Shridhar Pty Ltd; and Petrochemical Holdings Pty Ltd. It appears that US $4.1 million was transferred to the former at Mercury's request by the Emirates Bank on 13 September 2010 and US $850,000 to the latter also at the request of Mercury by Emirates Bank on 21 November 2010. Self-evidently these payments, accepting that they were loans, were not loans made to Mrs Oswal. Moreover they were made after the date the Promissory Note was executed. 85 I would not draw the inference advanced on behalf of Mrs Oswal. Rather, as I earlier stated, I infer that Mrs Oswal executed the Mortgage with the intent to defraud her creditors. I have so concluded for the reasons already explained and those which now follow. 86 The Mortgage was executed shortly after three things occurred concerning Mrs Oswal directly: the making of a demand for approximately US $529 million on 3 December 2010 by ANZ on the personal guarantee given by Mrs Oswal; the appointment on 16 December 2010 by ANZ of receivers to the shares of Mrs Oswal in Burrup Holdings; and the appointment on 17 December 2010 by ANZ of receivers to Burrup Holding's shares in Burrup Fertilisers and the assets and undertakings of the latter company. At the time these events occurred, Mrs Oswal believed that ANZ was a creditor of hers and, I infer, was very concerned about her financial position. This last fact I infer as being highly probable for someone in her apprehended very serious financial position confronted with these events and most particularly the massive claim under the guarantee she had provided and which she believed to be enforceable against her by the ANZ. 87 The Mortgage was executed by Mrs Oswal whilst overseas following her unexplained and abrupt departure from Australia together with her husband on 13 December 2010, just 10 days after the demand by ANZ upon her under the guarantee. 88 It was submitted on Mrs Oswal's behalf that she and her husband, as temporary residents in Australia under so called 457 visas, were, upon Mr Oswal's employment terminating with Burrup Holdings, required to leave Australia. This termination was said to have occurred upon the appointment of receivers to that company on 17 December 2010. 89 I do not accept this submission. A number of observations may be made in this respect. Mr Oswal too was served, on 3 December 2010 with a demand under his guarantee to the ANZ in the sum of approximately US $529 million. The Oswals left Australia prior to the appointment of those receivers. There is no evidence that Mr Oswal's employment terminated on 17 December 2010. The endorsement on Mr Oswal's passport is to the effect that his temporary residence in Australia is subject to Schedule 8 of the Migration Regulations 1994, in particular at 8107. This does not provide for immediate suspension or cancellation of the visa upon the termination of employment. The endorsement also noted that he was permitted to remain in Australia until 1 March 2012. 90 Whatever be the precise position concerning his entitlement to remain in Australia I do not accept that it was this which caused his wife, Mrs Oswal, to leave Australia so abruptly. It has not been explained other than by unsupported assertion why these events, even if correct, caused Mrs Oswal, who was not permitted to work and who was not employed, to leave so abruptly. The endorsement on her visa permitted her to remain in Australia until 1 March 2012. 91 I infer that it was as a result of receiving the demands under their respective guarantees that she and her husband left Australia. 92 The Mortgage, I find, was prepared, granted and registered in haste. It was signed by Mrs Oswal whilst she was overseas, shortly after her abrupt departure from Australia. It was not dated by Mrs Oswal, nor was her signature witnessed by any person. The witness attestation was later falsely completed by a Ramesh Sodum in Australia. He was not present at the time it was signed by Mrs Oswal. As I earlier mentioned, Ramesh Sodum was in Australia between 12 November 2010 and 25 December 2010. Mrs Oswal left Australia on 13 December 2010. Some person, unknown, dated the Mortgage 24 December 2010, which is also the date of its registration. Significantly, concerning the question of haste, the Mortgage makes no reference to the Promissory Note. It contains no provision pursuant to which Mrs Oswal is rendered liable to repay funds lent, according to the Promissory Note, to Mr Oswal. These are extraordinary omissions given the submission put on behalf of Mrs Oswal that I should infer that she granted the Mortgage because her husband, by clause 7 of the Promissory Note, had agreed with Mercury that such mortgages would be provided if an event of default occurred. 93 The Mortgage was executed in favour of a company owned by Mrs Oswal's brother, Mr Gupta. 94 Mrs Oswal had no legal obligation to Mercury to grant the Mortgage and no valuable consideration was received by her for granting the Mortgage. Thus, the grant was voluntary. 95 The Mortgage encumbered Mrs Oswal's only real property assets in Australia. The combined value of the Properties, as Mrs Oswal admitted in her amended defence, as at December 2010 was $45 million. 96 Mrs Oswal, in her Further Amended Defence at [14(g)], admitted the allegation in [17] of the Further Amended Statement of Claim that she had asserted that the Mortgage was to secure debts of $45 million incurred by her to Mercury during 2009 and 2010. This assertion was false at the time it was made and I infer was false to Mrs Oswal's knowledge. It is highly improbable that she would have made such an assertion by mistake. Nonetheless, this defence, in effect, at [14(a)-(d)] disavowed that earlier assertion. 97 Whilst the Promissory Note manifests a number of unusual features, I have not taken these into account in reaching my conclusion as to Mrs Oswal's intention in granting the Mortgage. 98 I was invited by Counsel for Mercury to treat the Promissory Note according to its terms, which I have done. Whatever was the fact as to the funds loaned by Mercury, none whatsoever were loaned to Mrs Oswal. She had no obligation to repay any loans. It was not submitted by either of the respondents to the contrary. 99 In summary I find by inference, having regard to all the circumstances to which I have referred, that Mrs Oswal had the relevant intent and in particular where the natural and probable consequences of the disposition was the defeat or delay of Mrs Oswal's creditors and where as I have found, the Mortgage: (1) was granted when Mrs Oswal believed upon objectively reasonable grounds that she was in parlous financial circumstances; (2) was prepared in haste; (3) was granted without consideration; (4) was granted voluntarily; (5) was granted to Mercury which was owned and controlled by a close family member, namely Mrs Oswal's brother; (6) had the effect of alienating Mrs Oswal's entire real property assets within Australia. 100 These circumstances individually or in some combination are such as to have shifted the evidentiary onus to Mrs Oswal upon the issue as to her intention. She did not discharge that evidentiary burden. This has enabled me to draw more readily the inference as to Mrs Oswal's intention. 101 I also infer, that when she granted the Mortgage, to her knowledge, she had actual or future creditors, including in relation to income tax as well as obligations, as the owner of the Properties, to council rates, land tax, water rates and the like. The latter are ordinary incidents of property ownership. 102 At the time the Mortgage was granted, the Commissioner was a present creditor of Mrs Oswal, by operation of law. By reason of the operation of s 5-5 of the Income Tax Assessment Act 1997 (Cth) and s 250-10 of Schedule 1 of the Taxation Administration Act 1953 (Cth), as least the income tax the subject of the notice of assessment issued for the 2007 income year was due and payable prior to the date of alienation (24 December 2010) despite not having been issued by the Commissioner until February 2011. 103 I am prepared, on the evidence, to infer that in January 2009 Mrs Oswal knew that the Commissioner was making enquiries as to her tax affairs, which was referred to in correspondence mentioned above, but I also infer that as at February 2009 she knew that her tax agent was of the opinion that she had then no present tax liabilities. This is not to conclude that she then, in fact and law, had no such liabilities. 104 However, I have already mentioned that judgment was entered against Mrs Oswal on 9 August 2011 in respect of tax liabilities in an amount of approximately $186 million in respect of the income years ended 30 June 2007 and 2010. This followed the assessments issued by the Commissioner in February 2011 in respect to those tax years. I infer, in these circumstances, that Mrs Oswal, at the time she executed the Mortgage, would on the balance of probabilities have known that she would have income tax liabilities for at least the financial year ended 30 June 2010 even if she was not aware of the precise amount of that liability at the time she granted the Mortgage. 105 My findings that Mrs Oswal had knowledge of actual creditors at the time she granted the Mortgage reinforces my conclusion as to her intention. However such findings are not necessary to proof of the relevant intent and my conclusion as to Mrs Oswal's intent does not depend upon those findings. Jones v Dunkel 106 Furthermore, whilst it is, in the circumstances, unnecessary to resort to the rule in Jones v Dunkel (1959) 101 CLR 298 at 308, 312 and 320-1, nonetheless I am again reinforced in the adverse inference I have drawn as to Mrs Oswal's intent by her failure to give evidence or to call her husband as a witness. Plainly their evidence would have gone to the central issues in the case. It is to be expected in this case that Mrs Oswal would have given evidence and that Mr Oswal would have been called by her to give evidence in support of her defence. Indeed that was her intention prior to the trial. I infer that the evidence each could have given would not have assisted Mrs Oswal's defence. 107 Neither Mrs or Mr Oswal gave direct evidence explaining their failure to give evidence. Evidence had been given by their solicitor, on information and belief during the course of Commissioner of Taxation v Oswal (No 5) [2015] FCA 1504. 108 The asserted explanation given in submissions was their desire not to be detained in Australia by a departure prohibition order (DPO) which might be made by the Commissioner in respect of each of them should they enter Australia: Taxation Administration Act 1953 (Cth) s 14S. 109 I accept that there was a risk of a DPO being served on each of them had they come to Australia for the purpose of giving evidence in this case. However, their assertion that a DPO would entitle the Commissioner to detain each of them in Australia "indefinitely" is overstated. The exercise of the power to issue a DPO is not unqualified. The Oswals would each have had an entitlement to appeal from any DPO (s 14V) or to seek a variation or revocation of any DPO (s 14T). 110 I do not regard this as a reasonable explanation for Mrs Oswal's failure to give evidence or to call her husband to give evidence. This is not a case where either of them was unable to come to Australia to give evidence. Rather, each has chosen not to come. This conclusion is not affected by the fact that last year the Oswals failed in judicial review proceedings seeking to assert wrongful conduct on the part of the Commissioner in failing to give an undertaking not to serve a DPO on each of them: Oswal v Commissioner of Taxation [2015] FCA 1439.

Section 89(3): the issue of onus 111 It is convenient to set out again the terms of s 89(3) of the PLA which provides: This section does not extend to any estate or interest in property alienated for valuable consideration and in good faith or upon good consideration and in good faith to any person not having, at the time of the alienation, notice of the intent to defraud creditors. 112 Mercury submits that this provision is not a defence and that the onus of proof of the negative of what is contained in s 89(3) is on the Commissioner. Mercury contends that the decision in PT Garuda at 527-528 is on point and is binding upon me. It also relies upon Huynh v Helleh Holdings Pty Limited [2001] NSWSC 1162 at [18], where Hamilton J considered that the reasoning in PT Garuda was relevantly applicable to the NSW equivalent of s 89(3) of the PLA. 113 Mercury submits that s 89(3) is a limitation upon the operation of s 89(1) and that the onus of proof is on the Commissioner as the moving party. It contends that the language in s 89(3) relevantly is not distinguishable from that in s 121 of the Bankruptcy Act considered in PT Garuda. 114 Accordingly, Mercury submits that the Court should find that the Commissioner has not discharged the onus of showing that s 89 of the PLA extends to the impugned transactions, as he has not established that the impugned transactions do not fall within s 89(3). The submission, put another way, is to the effect that it was incumbent on the Commissioner to prove that the mortgaged interest in the Properties was in each case not alienated to Mercury for valuable consideration, or upon good consideration in good faith, and that Mercury at the time of the alienation did have notice of Mrs Oswal's intention to defeat creditors. Alternatively, Mercury submits, if necessary, that the Court should be satisfied on the evidence that the impugned transactions do in fact fall within the proviso in s 89(3). 115 I reject those submissions. Mercury, in my opinion, carried the burden of demonstrating, by evidence, that s 89(3) was satisfied. Such was the conclusion of the NSW Court of Appeal in Wentworth v Rogers [2004] NSWCA 430 at [68] in relation to s 37A(3) Conveyancing Act 1919 (NSW) the NSW equivalent of s 89(3) PLA. Hodgson JA at [67], with whom Santow JA and Hislop J agreed, observed that the onus, under s 37A(3) "lies on the person seeking its protection". His Honour referred at [67], with approval, to what was said by Parker J in Glegg v Bromley [1912] 3 KB 474 at 492, who observed that: "Where … one comes to deal with the proviso, it is quite clear that any person relying on the proviso must prove both good consideration and the fact that he had no notice of the illegal intent." 116 His Honour also observed at [65] - [66] that PT Garuda concerned a quite differently worded provision in the Bankruptcy Act, in which the absence of valuable consideration and good faith on the part of the disponee were expressly made elements of the cause of action provable by the party seeking to avoid the transaction. He also concluded that Hyunh was dealing with that provision (s 121(1) of the Bankruptcy Act) and not s 121(2). Section 121(2), by contrast, is a proviso to s 121(1) and as his Honour pointed out, the onus lay on the party invoking it. This, his Honour concluded was also true of s 37A(3) of the Conveyancing Act 1919 (NSW). So much is also the case in relation to s 89(3) of the PLA. To the extent that Hyunh may be considered to be authority for the proposition that the decision in PT Garuda equates the provision in s 121(1) of the Bankruptcy Act with s 89(3) of the PLA then I would not follow it. Such a conclusion would, in my opinion, be clearly wrong. 117 It follows that I reject Mercury's submission that Wentworth is plainly wrong. Indeed I respectfully adopt its careful reasoning, analogously, in arriving at my conclusions as to the correct construction of s 89(3). 118 Wentworth has been applied in subsequent cases: See eg Bechara v Theodoros Haratsaris [2013] NSWSC 577 at [32]; B v U [2012] NSWSC 1416 at [12]-]13]. In B v U, applying Wentworth, Pembroke J said at [13] that: "The party seeking to have the benefit of Section 37A(3) [the equivalent of s 89(3)] must positively prove the necessary statutory ingredients. It is not necessary for the plaintiff to plead that the section has not been satisfied or to seek to negative the statutory ingredients of the section in its case in chief." 119 As the Commissioner submits, the plurality in Marcolongo at [12] and [54] described the Elizabethan Statute as containing "a proviso" in favour of innocent third parties and then cited with approval the same passage from Parker J's judgment in Glegg v Bromley at 492, concerning the onus of proof as had been relied upon by the NSW Court of Appeal in Wentworth set out above. 120 In Regal Castings, Elias CJ at [15], and Blanchard and Wilson JJ at [51], expressly characterised the New Zealand provision equivalent to s 89(3) as a defence and it was implicit to this effect in the judgments of Tipping J at [128] and McGrath J at [168]. 121 Lee AJA (with whom Drummond AJA agreed) in Westpac v Bell Group (No 3) at [514], referred with apparent approval to the fact that Owen J had proceeded at trial on the same basis with respect to s 89(3) of the PLA "because the legislative provisions recited those requirements as provisos to, rather than elements of, substantive provisions" 122 Indeed, in its amended defence at [17] Mercury, in effect, pleaded reliance on s 89(3). It asserted that the Mortgage was taken by it for valuable consideration, in good faith and without notice of any intent to defraud creditors, which is the language of s 89(3). It did not call Mrs Oswal's brother, Mr Gupta, who is Mercury's sole shareholder and one of its directors nor any other director to give evidence in order to attempt to make this defence good, but rather resorted to its volte face at trial that it carried no such burden. 123 I find that any defence which might have been available to Mercury under s 89(3) has not been established. 124 Moreover, I positively conclude that the Mortgage was not given in return for either "valuable consideration" or "good consideration", and that it was not alienated in good faith. I have already found that Mrs Oswal's intent when granting the Mortgage was to defraud her creditors. Mercury, self-evidently, must have known that Mrs Oswal had no legal or other obligation to grant to it the Mortgage, and that in so doing she would be putting the Properties beyond the reach of her creditors. Mercury, by its owner Mr Gupta, Mrs Oswal's brother, knew of the demands made against Mr Oswal, Burrup Holdings and Burrup Fertilisers. I infer that Mr Gupta would also likely have learned of the demands against his sister directly from her. That seems highly probable. Mercury knew of the other demands as they were the trigger under clause 8 of the Promissory Note to call on Mr Oswal to provide mortgages over the Properties. 125 Mrs Oswal received no valuable consideration in return for granting the Mortgage. She had not borrowed monies from Mercury. She was not a party to any loan agreement in respect of such monies. 126 Mercury, in its Defence at [17], alleged a promise on its part made to Mr Oswal, and through him Mrs Oswal, to forbear from immediate enforcement of the terms of the Promissory Note as against Mr Oswal. There is no evidence of this. The pleaded forbearance is illusory. Mrs Oswal had no obligations to Mercury. She required no forbearance. The time for repayment of the loans by Mr Oswal had not arrived. His only obligation given the events of default was to procure the mortgages. He required no forbearance from Mercury. 127 Mercury did not plead the existence of "good consideration" under s 89(3) nor did it adduce evidence of such. In any event, "good consideration" refers to "the natural affection that a spouse bears towards his or her spouse and children". It has no application as between Mrs Oswal and Mercury.

Conclusion 128 It follows from these reasons that I find that Mrs Oswal executed each mortgage the subject of the Mortgage in respect of the Properties with intent to defraud her creditors. Thereby each mortgage is voidable pursuant to s 89(1) of the PLA at the instance of the Commissioner. There is no reason why I should not declare the mortgage in respect of each property void and I will do so. 129 The Commissioner is entitled to an order as to costs. I will hear the parties in due course as to what particular costs orders should be made. There may also be consequential orders which the Commissioner might seek. 130 Accordingly, I will grant liberty, in light of these declarations and these reasons, to the Commissioner, to apply within 14 days, upon notice to the respondents, for any consequential relief, including as to costs. I certify that the preceding one hundred and thirty (130) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.