Davidson v Official Receiver [2026] FCAFC 15

Boensch v Pascoe [2019] HCA 49; (2019) 268 CLR 593

CK Nominees Australia Pty Ltd v Official Receiver (WA) (2007) 160 FCR 524; [2007] FCAFC 118

Clout v Anscor Pty Ltd (2003) 1 ABC(NS) 44; [2003] FCA 326

Davidson v Official Receiver (No 2) [2024] FedCFamC2G 429

DPP v Vlahos [2021] VCC 2074

Halse v Norton [1997] FCA 673; (1997) 76 FCR 389 at 392

In the matter of Courtenay House Capital Trading Group Pty Limited (in liq) [2020] NSWSC 780

Lordianto v Commissioner of the Australian Federal Police [2019] HCA 39; (2019) 266 CLR 273

McIntosh v Fisk [2017] NZSC 78

Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372 at 426-427

Re Lucera; Ex parte Official Trustee in Bankruptcy v Lucera [1994] FCA 1380; (1994) 53 FCR 329

Re McLernon; Ex parte SWF Hoists & Industrial Equipment Pty Ltd v Prebble [1995] FCA 1408; (1995) 58 FCR 391 at 401

Re My Mortgage Auction Corp [2025] BCSC 1520

Re O'Halloran [2002] FCA 1305

Re Pearson; Ex parte Wansley v Pearson (1993) 46 FCR 55

Taylor v Owners - Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 531

Tsakirakis v Official Receiver (2013) 276 FLR 66; [2013] FCCA 106

Vale v Sutherland (2009) 237 CLR 638

Westpac Banking Corporation v The Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1

White (Trustee); In the matter of Vlahos (a bankrupt) v Ljubicic [2017] FCA 717

PHILIP NEWMAN, IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF WILLIAM STEPHEN VLAHOS

1. The appeal be dismissed.
2. The appellant pay the respondents' costs of the proceedings, to be agreed or taxed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. The appellant, Mr Sam Davidson, appeals from a decision of the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA) to dismiss his application for relief in relation to a notice given by the Official Receiver under s 139ZQ of the Bankruptcy Act 1966 (Cth) (the Act), by which he was required to pay an amount equal to the money received by him as a result of a void transfer of property by Mr William Vlahos, a person who later became a bankrupt: Davidson v Official Receiver (No 2) [2024] FedCFamC2G 429 (J).
2. Mr Vlahos conducted a fraudulent gambling scheme known as "The Edge", pursuant to which he purported to place bets on horse races on behalf of various individuals and syndicates. The appellant, unaware of the fraudulent nature of this scheme, provided money to Mr Vlahos on behalf of a syndicate of which he was a member. Mr Vlahos paid amounts to the appellant which purportedly represented "winnings" on bets that had been placed on his behalf. The appellant distributed those amounts among the members of his syndicate.
3. After the fraud was discovered, Mr Vlahos was declared bankrupt. The second respondent, the trustee of Mr Vlahos' bankrupt estate (the Trustee), sought to recover the net amount that had been paid to the appellant pursuant to the fraudulent scheme, on the ground that there had been a transfer of property by Mr Vlahos that was void against the Trustee under Div 3 of Pt VI of the Act. On an application by the Trustee, the Official Receiver gave to the appellant a notice under s 139ZQ of the Act (the Notice), requiring him to pay the net amount of the money that he had received from Mr Vlahos. This included payments that were made by Noble Edict Pty Ltd, a company controlled by Mr Vlahos, from a bank account over which Mr Vlahos exercised exclusive control. After taking into account payments that had been made by the appellant to Mr Vlahos as "consideration" for the amounts received by him, the trustee claimed a total sum of $11,398,552.51.
4. The appellant commenced proceedings by which he sought to set aside the Notice under s 139ZS of the Act, and to review the act of the Official Receiver in giving the Notice pursuant to s 15(5) of the Act. The appellant also sought a declaration under s 30(1) of the Act that Subdiv J of Div 4B of Part VI (which contains s 139ZQ) was not applicable based on the alleged facts and circumstances set out in the Notice. The primary judge held that the payments by Mr Vlahos and by Noble Edict to the appellant involved a transfer of property by Mr Vlahos that was void against the Trustee under s 120 of the Act, and that the appellant had not established any reason to set aside the Notice.
5. The following issues are raised on the appeal:

(a) whether, for the purposes of s 120 of the Act, the appellant gave consideration of no less value than the market value of the property transferred to him by Mr Vlahos;

(b) whether the primary judge erred in finding that payments made to the appellant from a bank account held by Noble Edict were payments of money by Mr Vlahos;

(c) whether the Notice was properly given, in circumstances where the Official Receiver had been made aware that the appellant disputed or challenged the alleged facts and circumstances set out in the Notice; and

(d) whether the primary judge misconstrued s 139ZQ by limiting the Notice to the net amount that the appellant had retained for his own benefit, and as not requiring payment of amounts that had been distributed by the appellant to other syndicate members.

1. The appeal should be dismissed for the reasons set out below. In summary:

(a) The payments by Mr Vlahos did not represent winnings or other amounts payable under any contract with the appellant, and the consideration given by the appellant was less than the market value of the payments received by him. Accordingly, the appellant received the payments as a result of a transaction that was void against the Trustee under s 120 of the Act.

(b) There was no error in the primary judge's finding that payments made from Noble Edict's bank account were payments of money by Mr Vlahos.

(c) The fact that the appellant had indicated in correspondence that he challenged the Trustee's claims did not prevent the Official Reviewer from reaching a view on the available material that the transaction was void against the Trustee, for the purposes of exercising the power under s 139ZQ(1) of the Act. Accordingly, the primary judge was correct in concluding that there was no basis on which to set aside the Notice.

(d) For the purposes of the appeal, it is unnecessary to determine whether the primary judge misconstrued s 139ZQ(1) in concluding that the amount contained in the Notice was incorrect.

1. The parties filed a List of Agreed Facts for the purposes of the proceedings below, which is reproduced in the primary judge's reasons: J [17]. The appellant also relied on his affidavits affirmed on 31 January 2020, 22 June 2023 and 9 February 2024. Affidavits were also filed by the Official Receiver and the Trustee. For present purposes, the key facts may be summarised as follows.
2. Mr Vlahos was involved in organising a gambling scheme known as "The Edge", pursuant to which he pooled money on behalf of a number of members, including syndicates and sub-syndicates of members, for the purported purpose of wagering on horse races. The scheme was fraudulent, and Mr Vlahos was ultimately convicted and sentenced to imprisonment on two charges of obtaining financial advantage by deception: see DPP v Vlahos [2021] VCC 2074.
3. In White (Trustee); In the matter of Vlahos (a bankrupt) v Ljubicic [2017] FCA 717 at [4]-[7], Beach J referred to the results of investigations that were carried by Mr Vlahos' then trustees in bankruptcy:

After their investigations, the trustees reached the conclusion that the punting club operated by the bankrupt was a Ponzi scheme. The trustees' investigations also revealed that despite reporting to members of the punting club that he was placing bets on their behalf, the bankrupt failed to wager those bets to the extent or at the odds reported to the members of the punting club. Further, the net winnings reported to members of the punting club were substantially overstated by the bankrupt.

The trustees' investigations have revealed that the bankrupt utilised the funds of some punting club members to meet withdrawal requests of other punting club members. Further, the bankrupt was living off the proceeds of the funds invested and also used these funds in certain companies controlled by him, including [Noble Edict].

As to Noble Edict, the bankrupt was the sole director thereof. The bankrupt operated the bank account of that company, such that he would transfer payments from his own bank account into the bank account of Noble Edict, and usually draw an equivalent sum in payments to punting club members.

Generally, the trustees' investigations have revealed that any return to members of the punting club appears to have been sourced from new members' funds.

Although the appellant was not a party to those proceedings, the description set out above is consistent with the agreed facts and the evidence in the present case, subject to the qualification that the appellant disputed that the payments made through Noble Edict's bank account could be characterised as a transfer of property by Mr Vlahos.

1. In January 2005, the appellant became an investor in the scheme. From about June 2006, he was the leader of a syndicate that invested in the scheme. Between about 14 January 2005 and 2 September 2013, he paid a total amount of $1,879.116.49 to Mr Vlahos to bet on horse races.
2. During the period from 1 January 2008 to 31 December 2013, members of the scheme were sent weekly "ratings sheets" which purported to set out bets to be placed by Mr Vlahos on specified horses if he could obtain odds at or exceeding "rated prices" for those horses. After the race meetings, Mr Vlahos emailed "betting sheets" which purported to account for the previous day's betting, but which falsely overstated or fabricated the bets placed, the odds obtained and the profits made.
3. The appellant gave evidence as to the terms of his oral agreement with Mr Vlahos. Under the agreement, the appellant would deposit money into Mr Vlahos' account which would be included in a pool available for use by Mr Vlahos to place bets. Winnings and losses were to be proportionately allocated between members of the scheme, after the deduction of a commission on winnings and a quarterly administration fee.
4. From late 2008, the syndicate members paid their deposits into a pooling account operated by the appellant, who would then transfer funds to Mr Vlahos on behalf of himself and other syndicate members. The appellant said that the syndicate comprised his family members, friends, and their family members and friends, and that the arrangements between him and other syndicate members were oral and not in writing.
5. The appellant believed at the time that "The Edge" was a genuine betting scheme, and that Mr Vlahos was performing his obligations under their agreement. When he received funds from Mr Vlahos, the appellant distributed amounts to syndicate members, including himself: J [79]-[80].
6. Between about 3 July 2009 and about 10 April 2012, Mr Vlahos made payments from his own bank account to the appellant which amounted to $3,857,669. On 19 June 2012, Mr Vlahos opened a bank account in the name of Noble Edict as trustee for the Noble Edict Investment Trust (the Noble Edict Account). At the relevant time, Mr Vlahos was the sole director and secretary of Noble Edict. Between about 11 July 2012 and about 23 May 2013, payments were made to the appellant from the Noble Edict Account which amounted to $9,420,000. Noble Edict later went into liquidation and was deregistered.
7. The appellant gave evidence that he had distributed $12,357,075 to other syndicate members from the amounts paid by Mr Vlahos and Noble Edict, retaining an amount of $932,148 as his own share: J [77].
8. On 16 December 2013, Mr Vlahos presented a debtor's petition that was subsequently accepted by the Official Receiver. Under s 115(2) of the Act, Mr Vlahos' bankruptcy commenced at the time of presentation of the petition.
9. On 6 December 2019, the Official Receiver issued the Notice, having received an application by the Trustee under s 139ZQ(1) of the Act. The Notice required payment by the appellant of the sum of $12,507,025.84. However, this amount was subsequently reduced in the light of additional transfers made by the appellant to Mr Vlahos that had not been accounted for in the Notice. Accordingly, the Trustee ultimately claimed an amount of $11,398,552.51, which was calculated as:

(a) the amount of $3,857,669 that was transferred by Mr Vlahos to the appellant;

(b) the amount of $9,420,000 that was transferred by Noble Edict to the appellant;

(c) the amount of $1,879,116.49 that was transferred by the appellant to Mr Vlahos.

1. The Notice contained a Schedule setting out the facts and circumstances because of which the Official Receiver considered that the payments made by Mr Vlahos to the appellant were void as against the Trustee. Those facts and circumstances included the conduct of the betting scheme as a Ponzi scheme, the use of the funds by Mr Vlahos, the false reporting of betting activities and profits, and the payments made to the appellant by Mr Vlahos both directly and through the Noble Edict Account.
2. The appellant commenced a proceeding in the FCFCOA in which he claimed a declaration that Subdiv J of Div 4B of Pt VI of the Act did not apply to him on the basis of the alleged facts and circumstances set out in the Notice, an order under s 139ZS that the Notice be set aside, and review under s 15(5) of the act of the Official Receiver in giving the Notice to him. The appellant did not press other claims for declaratory relief under s 30(1) in relation to the Trustee's entitlement to commence an action against him under s 120 or his entitlement to set off certain amounts against the claim set out in the Notice: J [15].

1. The primary judge found that the payments made to the appellant by Mr Vlahos were void against the Trustee under s 120 of the Act, as undervalued transactions within five years of the commencement of the bankruptcy. For such purposes, her Honour accepted that the amounts that were transferred by the appellant pursuant to the betting scheme could be treated as consideration for the amounts that he received from Mr Vlahos: J [9]. However, as the value of the consideration was less than the market value of the property transferred (being the nominal value of the money paid), the transfer was void under s 120 of the Act: J [30]-[33].
2. The primary judge dealt with a submission made by the appellant that the money paid to him represented winnings to which he was contractually entitled under his agreement with Mr Vlahos, and therefore constituted the payment of a debt owed by Mr Vlahos rather than a transfer of property for the purposes of 120(1) of the Act. The primary judge addressed this argument as follows (at J [26]-[30]):

In oral submissions, Mr Davidson made a different point, which was that the consideration consisted of Mr Vlahos repaying a debt to Mr Davidson. The debt arose, Mr Davidson said, from an agreement between Mr Davidson and Mr Vlahos whereby Mr Davidson would give Mr Vlahos money, Mr Vlahos would use that money to place bets, and Mr Vlahos would give the winnings to Mr Davidson.

In response, the trustee submitted that there was no debt from Mr Vlahos to Mr Davidson because there were no winnings. That is because Mr Vlahos did not use the money provided by Mr Davidson to place bets. The money Mr Vlahos paid Mr Davidson was money provided by other investors in Mr Vlahos's Ponzi scheme.

It was an agreed fact that Mr Vlahos, in his reports to participants in his betting scheme, overstated or fabricated bets and made false claims about the odds obtained and the profits made. Mr Graham's unchallenged evidence was that, between April 2004 and December 2013, Mr Vlahos had net gambling losses of $6,401,579.82.

That is all well and good, but that evidence says nothing about the precise bets that Mr Vlahos told Mr Davidson he was going to make, and what the result would have been if Mr Vlahos had placed those bets. It was that amount for which Mr Vlahos was indebted to Mr Davidson.

However, that is immaterial. Section 120 of the Act does not contemplate betting winnings or profitable investments. It deals only with the relative market values of the property transferred between Mr Davidson and Mr Vlahos. It was common ground that what Mr Davidson transferred was $1,879,116.49 and what Mr Vlahos transferred was $3,857,669.

1. The primary judge rejected the appellant's argument that the payments from Noble Edict did not involve a transfer of property by Mr Vlahos, finding that "the payments from Noble Edict to [the appellant] were in fact payments from Mr Vlahos, albeit via the conduit of Noble Edict": J [56].
2. In reaching this conclusion, the primary judge found that Mr Vlahos was ultimately in control of any payments made by Noble Edict: J [36]. Further, it had not been suggested that there was any reason for Noble Edict to transfer money to the appellant on its own account: J [37]. On the contrary, the appellant had given evidence that Mr Vlahos told him "that he would be operating through the Noble Edict company because he could transfer funds in and out of the company's bank account in greater quantities", and the appellant accepted this explanation without further inquiries: J [40]. Accordingly, the primary judge found that the appellant "understood at the relevant times that the payments he received from Noble Edict were payments from Mr Vlahos": J [41]. This was corroborated by the fact that the appellant had distributed the money received from Noble Edict to the members of his syndicate as payments from Mr Vlahos' betting scheme: J [38]-[39].
3. The appellant contended that, because payments were made into and out of the Noble Edict Account from various sources and to various recipients, it could not be said that the money in question came from Mr Vlahos and was "syphoned" through the Noble Edict Account: J [50], [53]. However, the primary judge considered that the present case was about "whether Mr Vlahos paid [the appellant] some money", and not about tracing funds, so that it was not relevant that the payments were "all mixed up": J [54].
4. In answering the question whether the money was paid by Mr Vlahos, the primary judge relied on the evidence that Mr Vlahos had told the appellant that he was using Noble Edict as a conduit, and that the appellant had treated money received from Noble Edict as money received from Mr Vlahos: J [55]. The primary judge also noted that "shortly before every payment from Noble Edict to [the appellant], Mr Vlahos paid the same amount or somewhat more into Noble Edict's account": J [56]. That conclusion was supported by a detailed factual analysis of each of the payments made to the appellant from the Noble Edict Account and corresponding transfers made into that account from Mr Vlahos' personal bank account: J [57]-[75].
5. The primary judge made the following finding (J [76]):

On the evidence, I am satisfied that [the relevant payments] were paid by Mr Vlahos to Mr Davidson, via Noble Edict. While Noble Edict is a separate legal entity from Mr Vlahos, it is abundantly clear that Mr Vlahos used Noble Edict as a conduit for his payments to Mr Davidson. That is sufficient for present purposes.

The distribution of funds by the appellant to other syndicate members

1. The appellant contended that he should not have to pay amounts that he had received from Mr Vlahos and distributed to members of his syndicate prior to the commencement of the bankruptcy.
2. The primary judge discussed a number of authorities relied on by the Trustee concerning the remedies available in respect of a transfer of property that is avoided under s 120 of the Act, and in particular whether moneys transferred by a bankrupt can be recovered notwithstanding that they have been dissipated by the transferee. Many of those authorities were distinguished by the primary judge on the basis that they were concerned with tracing the transferred property or its proceeds into other identifiable property held by the transferee, or in the hands of third parties who were not bona fide recipients for value: see e.g. J [86], [88], [90]. In the present case, the appellant had distributed the money to other syndicate members who had not been joined as parties, and against whom the Trustee was not seeking any relief. As the primary judge observed, "[m]ost of the money has not remained in some derivative form in [the appellant's] hands, and the trustee is not seeking anything from the third parties to whom [the appellant] distributed the funds": J [88].
3. The primary judge considered (at J [106]-[109]) that the weight of authority supported the proposition that no personal remedy would lie against the transferee if the transferred property had been paid away or sold prior to the commencement of the bankruptcy and the avoidance of the transfer, referring to Re O'Halloran [2002] FCA 1305 at [79] (Allsop CJ), Westpac Banking Corporation v The Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1 at [2543] (Drummond AJA) and Clout v Anscor Pty Ltd (2003) 1 ABC(NS) 44; [2003] FCA 326 at [90] (Drummond J). Accordingly, her Honour held that "under s 120 of the Act, the trustee could not recover from [the appellant] monies that he had disbursed to the members of his syndicate prior to the commencement of the bankruptcy of Mr Vlahos": J [109].
4. Nevertheless, there remained a question whether s 139ZQ provided the Trustee with a remedy against the appellant in relation to the money that had been distributed to other syndicate members. The primary judge did not consider that this question was answered by reference to notions of unconscionability, nor whether it would result in the creation of "a liability greater than that created by s 120 of the Act": J [114]-[117]. Rather, her Honour approached the question as one of statutory construction. After referring to Taylor v Owners - Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 531 at [38] (French CJ, Crennan and Bell JJ), [65] (Gageler and Keane JJ) in relation to the (limited) circumstances in which additional words can be read into legislation in order to expound the meaning of the statutory text, the primary judge concluded (J [123]-[125]):

It seems to me that reading "as a result of a transaction that is void against the trustee" in s 139ZQ(1) of the Act as meaning "as a result of a transaction to the extent that is void against the trustee" is what the Parliament actually meant. That meaning is consistent with the weight of authority on the remedies available under s 120 of the Act. It is consistent with the object of s 139ZQ of the Act, as explained in the explanatory memorandum, which was to give a quick and inexpensive administrative mechanism to trustees to recover amounts that they were entitled to under s 120 of the Act, but which they would have otherwise had to have commenced legal proceedings to recover. There is nothing in the explanatory memorandum to suggest that trustees, acting under s 139ZQ of the Act, would be able to recover more than they would have been able to recover under s 120 of the Act.

Subject to the discussion below, this would require Mr Davidson to pay the trustee the amount that he received from Mr Vlahos and retained for his own benefit, less the money that Mr Davidson paid Mr Vlahos on Mr Davidson's own account. That is, it would only be the money that Mr Davidson paid on his own account, as opposed to on the account of the other members of his syndicate, that could be regarded as consideration for the purposes of s 120(4) of the Act.

I appreciate that this would mean that Mr Davidson would have to disgorge funds, while the other members of his syndicate would not. That does not seem fair. It seems to be the result of Mr Davidson being a conduit between Mr Vlahos and Mr Davidson's other syndicate members. The trustee considered, in these circumstances, that Mr Vlahos did not transfer money to Mr Davidson's syndicate members under s 120 of the Act. Mr Davidson's syndicate members were not pursued in this proceeding, so I take that issue no further.

(Emphasis in original.)

Whether the Notice should be set aside or reviewed

1. Based on the premise that s 139ZQ(1) required the appellant to pay only the amount that he had received from Mr Vlahos and retained for his own benefit, the primary judge considered that the Notice contained "the incorrect figure, being the whole amount of the monies [the appellant] had received from Mr Vlahos, including the amounts that [the appellant] had distributed to his syndicate members prior to the commencement of the bankruptcy": J [136]. However, the primary judge followed and applied Vale v Sutherland (2009) 237 CLR 638 at [16], [23], [26], where the High Court decided that a notice was not liable to be set aside under s 139ZS on the ground that it contained an error as to the amount recoverable under s 139ZQ(1), being the amount equal to the money or the value of the property received by the person to whom the notice is given.
2. The primary judge rejected the appellant's submission that the Notice should be set aside on the ground that Official Receiver was aware that the appellant challenged the facts and circumstances because of which it was alleged that the transaction was void against the Trustee. In support of that submission, the appellant relied on the decision in Tsakirakis v Official Receiver (2013) 276 FLR 66; [2013] FCCA 106 at [92]-[95] (Judge Lloyd-Jones), where the Official Receiver was on notice that a claim had been raised in pending legal proceedings which would require a judicial determination as to whether the transfer of property was actually void. The primary judge distinguished Tsakirakis on the basis that the challenge to the alleged facts and circumstances in the present case "consisted merely of correspondence" as opposed to legal proceedings that had been filed and were yet to be determined: J [131].

1. On 21 May 2024, the primary judge made orders dismissing the application, and awarding costs to the respondents.
2. Those orders reflected the unsuccessful outcome of the appellant's challenge to the validity of the Notice. However, no orders were made to give effect to the primary judge's conclusion (at J [124]) that the appellant was only required by s 139ZQ(1) to pay to the Trustee the net amount that he had retained for his own benefit, and not the amounts that had been distributed to other syndicate members. That conclusion did not itself provide a basis on which to set aside the Notice, nor did it establish that Subdiv J of Div 4B did not apply to the appellant on the basis of the alleged facts and circumstances set out in the Notice. Further, there was no basis on which to amend or read down the Notice so as to reduce the amount claimed: Vale at [19]-[20]. Any dispute about the accuracy of the amount to be paid to the Trustee was therefore left to be resolved in any subsequent proceedings to recover the debt: Vale at [16], [23].

1. The appellant raises the following grounds of appeal:

(a) the primary judge erred in finding (at J [30]-[33]) that the appellant received a transfer of property from Mr Vlahos in the period from 2009 to 2013, rather than the repayment of debts that Mr Vlahos owed to the appellant pursuant to the contractual arrangements between them (Ground 1);

(b) if the appellant received a transfer of property from the bankrupt, the primary judge erred in finding (at J [30]-[33]) that appellant did not give consideration, or gave consideration that was less than the market value, for that property (Ground 2);

(c) the primary judge erred in finding (at J [76]) that the payments made to the appellant by Noble Edict from the Noble Edict Account in 2012 and 2013 were payments made by Mr Vlahos (Ground 3); and

(d) the primary judge erred (at J [132], [136]) in failing to set aside or review or vary the Notice, in circumstances where the Official Receiver was aware of a genuine and substantial challenge by the appellant to the claims made in the Notice, and where the Notice "contained and required payment of a significantly incorrect amount of money" (Ground 4).

1. The Trustee filed a notice of contention, in which he contended that the orders made below should be affirmed on the following grounds:

(a) the transfers of property by Mr Vlahos were void by operation of s 120 of the Act, regardless of whether the proceeds had been distributed or paid to other persons, including other syndicate members;

(b) an amount equal to the total amount of the payments is recoverable by the Trustee from the appellant through the issue by the Official Receiver of a notice under s 139ZQ of the Act, regardless of whether the proceeds were distributed or paid to other persons, including other syndicate members, or whether the payments can be traced into the appellant's property; and

(c) the primary judge erred (at J [95], [123]) in concluding that payments of money by a bankrupt are not void (as distinct from recoverable) under s 120 of the Act unless the money is retained by the transferee or is traceable into property of the transferee and is not distributed to other persons, and in concluding that s 139ZQ of the Act does not provide for the recovery of money paid under a transaction that is void under s 120 unless the money is retained by the transferee or is traceable into property of the transferee.

1. In so far as these matters are advanced as grounds other than those relied on by the primary judge on which the judgment below should be affirmed (see Federal Court Rules 2011 (Cth), r 36.24), the Trustee appears to contend that the Notice required payment of the "correct" amount payable under s 139ZQ of the Act, in the event that the primary judge erred in concluding that the dispute about whether amounts distributed by the appellant could be recovered from him was not a sufficient reason to set aside the Notice.

1. Part VI of the Act deals with the administration of property in a bankruptcy. Division 3 of Pt VI deals with property available for the payment of debts. Section 120(1) of the Act deals with undervalued transactions, and provides as follows:

(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 transfer took place in the period beginning 5 years before the commencement of the bankruptcy and ending on the date of the bankruptcy; and

(b) the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property.

Note: For the application of this section where consideration is given to a third party rather than the transferor, see section 121A.

1. A payment of money can be a transfer of property for the purposes of s 120 of the Act: s 120(7)(a).
2. If the transfer took place more than two years before the commencement of the bankruptcy, or in the case of a transfer to a related entity more than four years before the commencement of the bankruptcy, the transfer is not void against the trustee if the transferee proves that the transferor was solvent at the time of the transfer: s 120(3). In some circumstances, there is a rebuttable presumption that the transferor was insolvent: s 120(3A). There does not appear to be any suggestion on the facts of the present case that Mr Vlahos was not insolvent at the time that the relevant payments were made to the appellant.
3. Where a transfer is void against the trustee, an amount equal to the value of any consideration that was given by the transferee must be refunded by the trustee: s 120(4).
4. Division 3 of Part VI contains separate provisions in relation to transfers of property that were made by a bankrupt for the main purpose of preventing the property from becoming divisible among creditors (s 121), and for the avoidance of transfers of property in favour of a creditor within a six-month period before the presentation of the creditor's petition or debtor's petition which had the effect of giving the creditor a preference, priority or advantage over other creditors (s 122).
5. Division 4B of Part VI of the Act relevantly deals with the recovery of property for the benefit of the bankrupt's estate: s 139J(b). To that end, Subdiv J of Div 4B provides for the collection of money or property by the Official Receiver from parties to transactions that are void against the trustee of a bankrupt. Section 139ZQ relevantly provides:

139ZQ Official Receiver may require payment

(1) If a person has received any money or property as a result of a transaction that is void against the trustee of a bankrupt under Division 3, the Official Receiver:

(a) if the Official Trustee is the trustee - on the initiative of the Official Receiver; or

(b) if a registered trustee is the trustee - on application by the trustee;

may require the person, by written notice given to the person, to pay to the trustee an amount equal to whichever of the following is applicable:

(c) if:

(i) the transaction is void against the trustee under section 128B or 128C; and

(ii) the transaction is by way of a contribution to an eligible superannuation plan for the benefit of a person (the beneficiary) who may or may not be the bankrupt; and

(iii) the beneficiary is a member of the eligible superannuation plan;

whichever is the lesser of the following:

(iv) the money or the value of the property received;

(v) the beneficiary's withdrawal benefit in relation to the eligible superannuation plan;

(d) in any other case - the money or the value of the property received.

(2) The notice must set out the facts and circumstances because of which the Official Receiver considers that the transaction is void against the trustee.

(3) The notice may:

(a) require the amount to be paid at a time or within a period set out in the notice; or

(b) require the amount to be paid at such times, and in such instalments, as are set out in the notice.

(4) After the Official Receiver has given a notice to a person under subsection (1), the Official Receiver may at any time, by a further notice given to the person, revoke or amend the first‑mentioned notice.

(5) If the Official Receiver gives a notice under this section, the Official Receiver must send a copy of the notice to the bankrupt and, if a registered trustee is the trustee, to the trustee.

(7) If a person is required by a notice under this section to pay to the trustee the value of any property, the requirement is taken to be complied with if the property is transferred to the trustee.

(8) An amount payable by a person to the trustee under this section is recoverable by the trustee as a debt by action against the person in a court of competent jurisdiction.

1. Section 139ZR subjects the property in respect of which notice is given under s 139ZQ to a charge in respect of the transferee's liability to make payments as required by the notice.
2. A notice given under s 139ZQ may be set aside on application to the Court under s 139ZS, which provides:

(1) If the Court, on application by a person to whom a notice has been given under section 139ZQ or by any other interested person, is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court may make an order setting aside the notice.

(1A) The application must be made:

(a) not later than 60 days after the day the notice under section 139ZQ was given to the applicant; or

(b) if the applicant is another interested person - not later than 60 days after the day the applicant became aware that the notice has been given.

(2) A notice that has been set aside is taken not to have been given.

1. A person who refuses or fails to comply with a notice under s 139ZQ commits an offence punishable upon conviction by imprisonment for a period not exceeding 6 months: s 139ZT(1). Further, upon conviction, the court may order the person to pay to the trustee an amount not exceeding the amount that the person refused or failed to pay to the trustee in accordance with the notice: s 139ZT(2).

1. It is convenient to address Grounds 1 and 2 together, as each is premised on an underlying contention that the amounts that were paid to the appellant by Mr Vlahos were in satisfaction of a debt arising under their contractual arrangement. The appellant submits that, in such circumstances, either there was no transfer of property within the meaning of s 120 (Ground 1) or that the appellant gave consideration for any transfer of property which was no less than the market value of the property transferred (Ground 2).
2. Each of these submissions, if accepted, would mean that the payments were not void against the trustee under Div 3 of Part VI, with the consequence that s 139ZQ would not apply to those payments. This would in turn provide a ground on which an order could be made under s 139ZS setting aside the Notice, in that Subdiv J of Div 4B would not apply to the appellant on the basis of the alleged facts and circumstances set out therein.
3. However, the arguments advanced by the appellant in support of Grounds 1 and 2 do not withstand scrutiny.
4. It is clear that s 120 can apply to a payment of money by a person who later becomes bankrupt: s 120(7)(a). There is no basis on which to exclude a payment of money that discharges a liability under a contract between the parties. In so far as the payee gave consideration for the payment, there may remain a question whether or not such consideration was of less value than the amount received for the purposes of s 120(1)(b). Accordingly, the fact that a payment of money is made in the performance of an obligation or in satisfaction of a debt arising under a contract does not preclude the application of s 120 of the Act to that payment as a transfer of property by the bankrupt. Section 120 is concerned with undervalued transactions, and is not confined to gratuitous transfers of property.
5. For completeness, there was no suggestion that the facts of the present case attracted the exemption under s 120(2)(c) in respect of a transfer of property under a "debt agreement" as defined in ss 5 and 185H for the purposes of Part IX of the Act.
6. The critical question in the present case concerns the identification and valuation of the consideration that was given by the appellant for the payments that he received from Mr Vlahos pursuant to the purported betting scheme. The appellant argued that mutual promises were made by the appellant and Mr Vlahos respectively, by which the appellant on behalf of the members of his syndicate would make payments to Mr Vlahos, in return for which Mr Vlahos promised to pay the "winnings" from bets placed on horses that were selected by him in accordance with his betting system. The oral agreement on which the appellant relied was pleaded by him as follows (in his "Points of Response" dated 15 February 2023 at [19C]):

He says further that he did give consideration to the Debtor for the payments that are the subject of the claim set out in the Notice. The consideration was exchange of promises that formed the agreement between applicant and the Debtor (Agreement), whereby he lodged money with the Debtor on behalf of the members of the syndicate that he represented so that the Debtor could use the money to make bets on horse races pursuant to a system devised by the Debtor and known as "The Edge" and return any winnings to the applicant on behalf of the syndicate members, thus generating a return more favourable than available at financial institutions.

1. On the appellant's argument, the amounts paid to him represented no more than the market value of Mr Vlahos' promise to pay those amounts in accordance with his contractual obligations, analogous to a bookmaker who is obliged to pay out winnings in addition to the amount staked in the event that a bet is successful. To extend this analogy, the amounts paid by the appellant and his syndicate were in exchange for a promise by Mr Vlahos to pay any returns or profits derived from his betting system, such that it could not be said that the value of the consideration given by the appellant was less than the market value of that promise, which ultimately gave rise to contractual obligations to make the payments to the appellant.
2. The appellant sought to distinguish Anscor Pty Ltd v Clout (Trustee) [2004] FCAFC 71; (2004) 135 FCR 469, in which a trustee in bankruptcy was entitled to recover under s 120 of the Act amounts paid by way of commissions to an "administrator" in return for introducing lenders into a scheme conducted by the bankrupt which purportedly involved making short-term loans to third parties at high interest rates. In that case, the Court found on the evidence that the value of the services provided by the administrator was less than the amount of the commissions that it received during the relevant period, and it had therefore given consideration of less value than the market value of the moneys paid to it by the bankrupt: Anscor at [46], [48]-[49], [62], [72]-[73] (Lindgren J, with whom Wilcox and Moore JJ agreed). The appellant drew a contrast with the facts of the present case, which did not involve the provision of any services or the transfer of any property to Mr Vlahos that was capable of valuation for the purposes of s 120 of the Act. Rather, the appellant argued that Mr Vlahos had simply paid amounts that were due and payable under his contractual arrangement with the appellant.
3. The difficulty with this argument, however, is that the payments made by Mr Vlahos were not in fact made in the performance of any contractual obligation. It was common ground that Mr Vlahos did not in fact place bets in accordance with his betting system, and that the amounts received by the appellant from Mr Vlahos did not represent or reflect actual winnings that had been generated from any such bets. Any contract that existed between the appellant and Mr Vlahos did not involve the latter placing particular bets on specified horses; rather, the selection of bets to be placed was left to Mr Vlahos to determine based on his system. Although Mr Vlahos provided "ratings sheets" and "betting sheets" that purported to account for his betting activities, it was agreed that the amounts shown were overstated or fabricated, and there was unchallenged evidence that Mr Vlahos in fact had net gambling losses as opposed to profits: J [28].
4. In such circumstances, irrespective of any subjective belief held by the appellant in relation to the character of the amounts paid, the payments by Mr Vlahos were not in fact made in the performance or fulfilment of any contractual obligation to the appellant. While the appellant might have had a cause of action against Mr Vlahos in respect of his failure to perform the contract or for money had and received, that does not mean that the amounts in fact paid by Mr Vlahos were moneys to which the appellant was legally entitled under the contract or otherwise. As the primary judge observed (at J [29]), the amount for which Mr Vlahos was contractually indebted to the appellant required an analysis of the bets that would have been placed under the contract and the winnings that would have resulted from those bets. The amounts that were in fact paid by Mr Vlahos to the appellant were made on a different basis, accompanied by false documentation setting out fictitious bets on horse races. The amounts were not "winnings" payable pursuant to any contract between the appellant and Mr Vlahos, but rather were sourced from money provided by other investors in the fraudulent betting scheme: J [25], [27]-[28].
5. The facts of the present case can be compared with those considered by the Supreme Court of New Zealand in McIntosh v Fisk [2017] NZSC 78, which was also concerned with the payment of fictious profits under a Ponzi scheme operated by an insolvent company. The appellant had entered into a funds management arrangement with the company, pursuant to which he paid $500,000 to be managed by the company as his investment portfolio. However, the company did not in fact invest the funds in accordance with the contract. Rather, the funds were misappropriated for the purposes of the Ponzi scheme, in the course of which the company provided reports to its clients listing fictitious securities transactions by reference to what was occurring in the market: McIntosh at [3]-[4] (Arnold, O'Regan and Ellen France JJ), [228]-[229] (Glazebrook J). When the appellant decided to cash out his portfolio, the company paid him an amount of $954,047, which represented the amount said to have been earned on his investment according to the fictitious reports that he had received from the company: McIntosh at [6]-[7] (Arnold, O'Regan and Ellen France JJ). The liquidators of the company subsequently sought the repayment of that amount under various statutory provisions dealing with the setting aside of dispositions made by an insolvent company.
6. The Supreme Court of New Zealand held in McIntosh that the payment by the company to the appellant was voidable. In particular, while recognising the value provided by the appellant in respect of his original investment of $500,000, the Court concluded that the payment to him of $954,047 was not the "discharge by performance or discharge by accord and satisfaction of his management contract" with the company, for the purposes of determining whether he had provided value or valuable consideration. The plurality (Arnold, O'Regan and Ellen France JJ) dealt with this argument as follows (at [122]-[123], [126]-[129]):

His argument in relation to discharge by performance was that he was paid out exactly as if the management contract had been performed, in accordance with the reports he had received during the term of the contract. He asserted RAM was estopped from denying the contract had been performed but gave no relevant authority for the assertion and we can see no proper basis for it. We see this argument as untenable in circumstances where the "performance" is simply the expression of the fraud perpetrated on the investors in the Ponzi scheme. ...

His argument in relation to discharge by accord and satisfaction is that his acceptance of the payment of $954,047 discharged RAM's obligations to him (as they were represented to be by RAM). The fact that there was fraud involved gave him the right to elect to avoid the discharge, but in the absence of such an election it remained effective. The problem with this argument is that the "obligations" said to have been discharged were not obligations at all.

...

The appellant said the Court of Appeal erred in bifurcating the payment into "capital" and "fictitious profit" components and in finding that the payment did not discharge RAM's antecedent obligation to him. The payment made to him by RAM left RAM and him in the position where neither had a claim against each other and they had gone their separate ways.

We do not consider the Court of Appeal erred in bifurcating the payment. ...

Nor do we consider the Court of Appeal was in error in its analysis of the appellant's claim that he gave value or provided valuable consideration for the $454,047 component of the payment. While the $500,000 component can be seen as discharging an antecedent debt to him, for the reasons given earlier, the $454,047 component did not discharge his unquantified (and, indeed, unknown) claim against RAM for equitable damages. As already noted, the $454,047 figure was the product of fictitious entries in reports made to the appellant by RAM. Those reports were the method of implementing the fraud perpetuated on the appellant by RAM.

There is no other basis for saying the $454,047 component was received for value or valuable consideration. ...

(Footnotes omitted).

1. Accordingly, their Honours considered that, although the appellant might have had a claim against the company for damages, the payment of an amount "according to a notional calculation of 'profit' based on fiction" (at [124]) was not made in discharge of any such liability of the company: see also McIntosh at [210] (William Young J). Justice Glazebrook observed (at [245]).

As to the argument that value was provided to RAM through discharge of the contract and any claims against RAM, Mr McIntosh was only ever entitled to the returns actually made on his investment. The returns in this case were fictitious. There was thus no contractual or other right to any of the profits because they did not exist. Any claim on the contract would be for returns, conceivably even negative, that would have been made had the funds been invested as agreed. Such a claim (which was not even known about at the time) cannot have been discharged by the payment of the fictitious profits.

(Footnote omitted)

1. It can be accepted that the issues in McIntosh arose in a different statutory context. Nevertheless, the decision provides an illustration of an approach that has been adopted in New Zealand to the clawback of returns paid to investors in a Ponzi scheme following its collapse. Such cases are essentially concerned with the allocation of losses among creditors of the scheme, and the question whether earlier investors who have profited from the scheme should be enriched at the expense of later investors: McIntosh at [55] (Arnold, O'Regan and Ellen France JJ); cf. In the matter of Courtenay House Capital Trading Group Pty Limited (in liq) [2020] NSWSC 780 at [15]-[24] (Rees J); see also Re My Mortgage Auction Corp [2025] BCSC 1520.
2. As the Trustee submitted in the present case, the outcome in McIntosh "reflects the impossibility of establishing market value consideration for illusory returns in a fraudulent scheme". The amounts paid by Mr Vlahos to the appellant were based on fictitious betting sheets, and did not represent amounts payable under the parties' contractual arrangement. The amounts therefore cannot be regarded as having repaid a debt owed by Mr Vlahos to the appellant, nor can the discharge of any such debt be treated as supplying consideration for the payments, let alone consideration of no less value than the market value of those payments, for the purposes of s 120 of the Act. To the extent that the appellant had a claim against Mr Vlahos in debt or damages, he would be entitled to prove in the bankruptcy along with other unsecured creditors.
3. This analysis is not affected by the fact that the appellant believed that the scheme was genuine, and that the amounts were winnings derived by placing bets in accordance with the scheme, at the time that he received the payments from Mr Vlahos. The identification of the transferred property and the valuation of any consideration given for the transfer must be determined on an objective basis: see e.g. Anscor at [66] (Lindgren J). Further, in circumstances where the transfer of property by Mr Vlahos is void against the trustee, it is not relevant whether the appellant is properly regarded as a bona fide recipient for value: Anscor at [34] (Lindgren J); cf. Australian Securities Investment Commission v Marco (No 13) [2023] FCA 83 at [187] (Feutrill J).
4. It follows that the primary judge was correct in treating the appellant's payment of $1,879,116.49 as the consideration provided for the amounts that he received from Mr Vlahos as purported winnings under the betting scheme. There was no dispute between the parties that this amount was refundable to the appellant under s 120(4) of the Act. The Trustee sought payment of the net amount received by appellant in excess of the amounts that were paid by him.
5. It is unnecessary to embark on a more general analysis of the potential application of s 120 of the Act to gambling transactions, or other profit-making investment schemes. On the facts of the present case, the payments by Mr Vlahos to the appellant were neither winnings nor profits. They were a transfer of property for the purposes of s 120, for which the appellant gave consideration of less value than the market value of the property, being the nominal value of the money paid to him.
6. Grounds 1 and 2 are therefore dismissed.

1. The appellant submitted that the primary judge erred in finding that the 16 transfers of money from the Noble Edict Account over the relevant period were properly characterised, for the purposes of s 120(1) of the Act, as transfers of property by Mr Vlahos prior to the commencement of his bankruptcy. Her Honour based that conclusion on findings that the amounts were paid at the direction of Mr Vlahos for the purposes of satisfying what he purportedly owed to the appellant under the betting scheme, together with the timing of payments made by Mr Vlahos into the Noble Edict Account shortly before each payment from Noble Edict to the appellant. The primary judge described Noble Edict as a "conduit" for Mr Vlahos' payments under the scheme: J [76].
2. The appellant argued that the funds paid by Mr Vlahos into the Noble Edict Account were mixed with other funds, including funds received from other sources, so that it could not be said that the amounts paid to the appellant from that account represented transfers of property by Mr Vlahos. The appellant submitted that Noble Edict was a separate legal entity, notwithstanding that it may have been controlled by Mr Vlahos at relevant times, and irrespective of whether the appellant and Mr Vlahos had considered it to be the alter ego of Mr Vlahos. The money in the Noble Edict account belonged to Noble Edict, it was argued, notwithstanding that Mr Vlahos had caused Noble Edict to pay money from its account in satisfaction of what was purportedly owed by Mr Vlahos to the appellant. Contrary to the approach adopted by the primary judge (J [54]-[55]), the appellant submitted that the question was whether the funds paid by Mr Vlahos into the Noble Edict Account could be traced into the payments made by Noble Edict to the appellant.
3. The Trustee submitted that this argument should be rejected for a number of reasons:

(a) first, because Mr Vlahos maintained exclusive signing authority over the Noble Edict Account;

(b) second, because there was evidence to establish a clear pattern of payments into and out of that account, apparently directed to the satisfaction of what Mr Vlahos purportedly owed to the appellant;

(c) third, because there was other evidence which substantiated the notion that Noble Edict served as a mere conduit as between Mr Vlahos and the appellant; and

(d) fourth, because, on the evidence, the parties themselves operated on that basis.

1. As he did before the primary judge, the appellant sought to rely upon the decision in Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) (2000) 202 CLR 588. That case concerned the proceeds received or receivable by a manufacturer in respect of the sale of goods, and whether those proceeds were the subject of a trust for the benefit of one of its suppliers. The trust in question was said to arise by reason of the terms on which the supplier delivered certain materials that were used by the manufacturer for the purposes of producing the goods. Under the relevant contractual terms, the supplier retained ownership of the materials until they were fully paid for by the manufacturer, and the manufacturer was required to hold such part of the proceeds of manufacturing as related to those materials on trust for the supplier. The majority recognised the existence of a trust, but nevertheless concluded that the supplier had not established on the evidence what property it comprised; that is, the supplier did not establish, evidentially, the requisite link between the funds held by the manufacturer (on the one hand) and the materials that had been supplied to it (on the other): Associated Alloys at [53]-[55] (Gaudron, McHugh, Gummow and Hayne JJ).
2. The appellant argued that the situation in the present case was analogous, in so far as the Trustee was unable to establish, evidentially, the required connection between the money that was paid by Mr Vlahos to Noble Edict (on the one hand) and the money that was transferred from Noble Edict to the appellant (on the other). He submitted that the fact that Mr Vlahos' payments had been mixed with other funds in the Noble Edict Account was fatal to those amounts being traced into the payments made from the Noble Edict Account to the appellant. In such circumstances, the appellant submitted that there was no proper basis upon which to conclude that the money in the Noble Edict Account was, in fact, Mr Vlahos's money, or was otherwise traceable such that the payments from the Noble Edict Account could be understood as having been made by Mr Vlahos. He submitted that tracing was only possible if there were a precise correlation between the amounts that were paid into the Noble Edict Account by Mr Vlahos and the amounts that were subsequently paid from that account to the appellant.
3. In our respectful view, the primary judge correctly rejected that submission. As her Honour noted (J [54]-[56]):

This is not a tracing case, so it is not relevant that, in some cases, the payments were "all mixed up". Tracing is a process by which a person who had rights over a particular property that has been disposed of is given rights over other property that has transactional links to the original property. There are particular conditions and restrictions that apply to tracing, including mixing. However, the present case is not about tracing. The present case is about whether Mr Vlahos paid Mr Davidson some money.

In answering that question, the court can rely on all the evidence, including Mr Davidson's own admissions that:

(a) Mr Vlahos told him that, in effect, he would be using Noble Edict as a conduit; and

(b) Mr Davidson treated money he received from Noble Edict as money received from Mr Vlahos, as evidenced by the fact that Mr Davidson paid that money to his own syndicate members.

Additionally, shortly before every payment from Noble Edict to Mr Davidson, Mr Vlahos paid the same amount or somewhat more into Noble Edict's account. I conclude that the payments from Noble Edict to Mr Davidson were in fact payments from Mr Vlahos, albeit via the conduit of Noble Edict. ...

1. That reasoning is unimpeachable. As demonstrated by the analysis of the circumstances of each of the 16 payments (J [57]-[76]), the conclusion that Mr Vlahos used Noble Edict as a conduit through which to satisfy the payment of his "debts" is inescapable. The pattern revealed by that analysis (and the evidence that supports it) is unmistakeable: immediately or shortly prior to every payment made by Noble Edict to the appellant, Mr Vlahos made a corresponding payment to Noble Edict. In most cases, the payment amounts were identical, or nearly identical. Minimal credit balances were maintained in the Noble Edict Account between the transactions. The notations on the bank statements in respect of most of the transfers reflected their purpose as an "internal transfer", and in several cases a "club" or "punting club tran[saction]".
2. Moreover, the appellant admitted that he had been told by Mr Vlahos that he would be "operating though" Noble Edict in making payments to the appellant under the betting scheme, which the primary judge correctly treated as a statement that he would be using Noble Edict as a conduit. The appellant's evidence was that Mr Vlahos said that he would do so because "he could transfer funds in and out of the company's bank account in greater quantities". The appellant received and dealt with the sums on the basis that they were in satisfaction of what Mr Vlahos was understood to owe him.
3. Respectfully, the primary judge was correct to conclude that the amounts received by the appellant from Noble Edict were, for the purposes of s 120(1) of the Act, transfers of property by Mr Vlahos. They were no less so by reason of the involvement of Noble Edict than by reason of the fact that they were made by bank transfer. The amounts were received in the form of credits recognised for his benefit by his bank. In Lordianto v Commissioner of the Australian Federal Police [2019] HCA 39; (2019) 266 CLR 273 at [76], Kiefel CJ, Bell, Keane and Gordon JJ explained:

[W]hen an originator instructs a bank to make a transfer from their account, the chose in action representing that credit balance is extinguished or reduced by the amount of the transfer...[A] fresh chose in action is created, or the value of an existing chose in action is increased, for the beneficiary which entitles them to withdraw an equivalent amount from their bank, subject always to the terms of their contract with their bank...[T]he property the beneficiary acquires is wholly distinct from the property which the originator had before the transfer.

1. The fact that Mr Vlahos, for reasons of administrative convenience, cleared the payments that he made through a corporate account managed by him is neither here nor there. For the purposes of s 120(1) of the Act, the choses in action that inured to the appellant's benefit when his bank credited his account with the amounts that Mr Vlahos caused Noble Edict to transfer are properly recognised as transfers of property by Mr Vlahos.
2. Accordingly, there is no error in the primary judge's conclusion. Ground 3 is not established.

1. The appellant submitted that the Notice should have been set aside for two reasons:

(a) first, because the Official Receiver was aware before giving the Notice that there was "a genuine and substantial challenge" by the appellant to the facts and circumstances because of which the transfer of property by Mr Vlahos was alleged to be void against the Trustee; and

(b) second, because the Notice required payment of an amount that the primary judge accepted was incorrect, and which significantly exceeded the amount that could have been recovered by the Trustee in proceedings brought under s 120 of the Act.

1. The primary judge dealt with the first of these submissions as follows (at J [132]), after distinguishing the decision in Tsakirakis:

Challenging the existence of a trustee's claim by correspondence is not a sufficient basis for the Official Receiver to refrain from issuing a s.139ZQ notice, if it would otherwise be proper to do so. Notices under s.139ZQ of the Act are meant to be a quick and inexpensive method for the trustee to recover payments. If there is a genuine dispute, the proper approach is to bring proceedings under s.139ZS of the Act, as has happened here.

1. The primary judge dealt with the second submission as follows (at J [136]):

In the present case, the s.139ZQ notice contained the incorrect figure, being the whole amount of the monies Mr Davidson had received from Mr Vlahos, including the amounts that Mr Davidson had distributed to his syndicate members prior to the commencement of the bankruptcy. Applying Vale to the present case, that is not a sufficient reason to set aside the s.139ZQ notice. There is no other reason to set aside the s.139ZQ notice

Her Honour's finding that the Notice contained an "incorrect figure" was premised on her construction of s 139ZQ(1) as authorising the Official Receiver to require a person to pay only those amounts that could have been recovered by the trustee from that person under s 120 of the Act. The correctness of this construction was challenged by the Trustee's notice of contention.

1. Division 4B of Part IV of the Act was inserted by the Bankruptcy Amendment Act 1991 (Cth), which commenced operation on 1 July 1992. Among other things, these amendments included Subdiv J, which was described in the extrinsic materials as introducing "new administrative enforcement mechanisms to facilitate the recovery of property into bankrupt estates, and to enable efficient collection of contributions": Explanatory Memorandum, Bankruptcy Amendment Bill 1991 (Cth) 5. In particular, the administrative mechanism was intended to address difficulties faced by trustees in bankruptcy who did not have sufficient funds to bring proceedings in respect of void transactions entered into before the commencement of the bankruptcy, or where the cost of bringing such proceedings would reduce the dividends payable to creditors: Explanatory Memorandum, pp 103-104. Thus, the Explanatory Memorandum stated (at p 13):

The Bill will include provision to enable the Official Receiver, on behalf of the Official Trustee and registered trustees to recover property, disposed of by a bankrupt in a transaction to defeat creditors which is void against the trustee, by administrative means, instead of exclusively by litigation. Setting aside void antecedent transactions by litigation can cause difficulties for trustees, and bankrupts can arrange their affairs on occasions confident in the knowledge that no action will be taken to set aside the transaction because of the costs associated with doing so. The new administrative procedures provided for in proposed Subdivision J of Division 4B of Part VI of the Act to be inserted by clause 25 of the Bill are based on provisions of the Income Tax Assessment Act 1936 and will enable more cost effective setting aside of void antecedent transactions and a correspondingly greater return for creditors.

1. The power conferred on the Official Receiver to give a notice under s 139ZQ(1) arises if "a person has received money or property as a result of a transaction that is void against the trustee of a bankrupt under Division 3" of Part VI of the Act. The notice is required to set out the facts and circumstances because of which the Official Receiver considers that the transaction is void against the trustee: s 139ZQ(2). However, the power under s 139ZQ(1) is conditioned on the receipt of money or property as a result of a void transaction, as opposed to the Official Receiver's satisfaction that the transaction is void against the trustee: Vale at [13]-[14]; see also Re McLernon; Ex parte SWF Hoists & Industrial Equipment Pty Ltd v Prebble [1995] FCA 1408; (1995) 58 FCR 391 at 401 (Carr J); Halse v Norton [1997] FCA 673; (1997) 76 FCR 389 at 392 (Black CJ). This jurisdictional fact is reflected in the Court's power under s 139ZS to set aside a notice given under s 139ZQ if it is satisfied that Subdiv J "does not apply to the person on the basis of the alleged facts and circumstances set out in the notice".
2. Thus, on an application under s 139ZS, the applicant can challenge the alleged facts and circumstances or seek to prove additional facts in defence to the liability asserted in the notice, and the Court may determine whether or not the person has in fact received money or property as a result of a transaction that is void against the trustee: Vale at [14]; Re McLernan at 400-401, 403 (Carr J). In that sense, the application to set aside the notice under s 139ZS proceeds as a hearing de novo. Such an application is "the means provided by the Act under which any dispute between the recipient of the notice and the trustee as to the application of Div 3 to the transaction is to be litigated": Halse at 398 (Lee and R D Nicholson JJ).
3. Further, provided that the applicant has adduced sufficient evidence to put the validity of the notice into question, the respondent trustee (or the Official Receiver, as the case may be) bears the onus of establishing that Subdiv J applies, whether by proving the existence of the facts and circumstances alleged in the notice or that other facts or circumstances existed that would render the transaction void against the trustee under Div 3 of Part VI: Halse at 392-393 (Black CJ), 398-399 (Lee and R D Nicholson JJ). If the Court is satisfied that Subdiv J does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court is obliged to exercise the power to set aside the notice - that is, there is no residual discretion not to exercise the power conferred by the section: Vale at [18].
4. Since 2015, s 139ZS(1A) has imposed a 60-day time limit on making an application to set aside a notice given under s 139ZQ. However, no issue arises in the present appeal as to the effect of this statutory limit on the right to de novo review of questions concerning the application of Div 3 of Part VI to transfers of property by a person who is insolvent or who later becomes a bankrupt.
5. There are other legal avenues available to the recipient of a notice given under s 139ZQ(1). Section 30(1)(b) confers power on the Court to grant declaratory and injunctive relief or other equitable remedies as considered necessary for the purposes of carrying out or giving effect to the Act. This power can extend to making "a declaration that the condition precedent to the operation of s 139ZQ had not been satisfied and also to grant an injunction restraining any further proceedings based upon a notice issued under that section": Re McLernan at 403 (Carr J); Halse at 392 (Black CJ). Nevertheless, as the High Court emphasised in Vale (at [19]-[20]), the power conferred by s 30 "does not authorise the making of an order which would bring about a result which differs from that prescribed elsewhere in the Act", including in s 139ZS. Accordingly, a notice that is set aside under s 139ZS is taken not to have been given and cannot be partially saved by severance, reading down or amendment.
6. In Re McLernan, Carr J considered that it may also be possible to raise a collateral challenge to the validity of a notice as a defence to debt recovery proceedings under s 139ZQ(8), or criminal proceedings under s 139ZT: Re McLernan at 403; see also Halse at 393 (Black CJ). In addition, the decision of the Official Receiver to give a notice under s 139ZQ is amenable to review under s 15(5) of the Act, as well as judicial review proceedings under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) or s 39B of the Judiciary Act 1903 (Cth). The supervisory powers exercised by the Court in a review under s 15(5) of the Act may be wider than those exercised on judicial review under the ADJR Act or the Judiciary Act: see CK Nominees Australia Pty Ltd v Official Receiver (WA) (2007) 160 FCR 524; [2007] FCAFC 118 at [36] (Moore J, with whom Tamberlin J agreed), [49]-[51] (Gyles J).
7. The limitations discussed above on the effect of a notice given under s 139ZQ were recognised soon after its commencement, and caused some judges to question the utility or value of Subdiv J: see e.g. Re Pearson; Ex parte Wansley v Pearson (1993) 46 FCR 55 at 60 (Wilcox J); Re Lucera; Ex parte Official Trustee in Bankruptcy v Lucera [1994] FCA 1380; (1994) 53 FCR 329 at 335-336 (Olney J_)._ Nevertheless, as Black CJ observed in Halse (at 393), "[i]n any particular case a notice may remain unchallenged and may facilitate the collection of money or property without the need for an application to the Court". To similar effect, Lee and R D Nicholson JJ considered that the purpose of Subdiv J was met in that "[i]f a notice served on a person under s 139ZQ remains uncontested, service of the notice provides the trustee with a right that may be enforced against that person, namely, the right to recover as a debt the sum claimed in the notice": Halse at 399.
8. A notice given under s 139ZQ(1) requires the person to whom it is given to pay to the trustee an amount equal to, relevantly, "the money or the value of the property received" as result of the void transaction: s 139ZQ(1)(d). The notice may require that amount to be paid at a specified time, within a specified period, or in specified instalments: s 139ZQ(3). An amount payable under s 139ZQ can be recovered by the trustee as a debt by action against the person in a court of competent jurisdiction: s 139ZQ(8). The debt is the amount payable by the person to the trustee under s 139ZQ, which is the amount equal to "the money or the value of the property received" as result of the void transaction. For such purposes, the value of any property referred to in the notice means the market value of the property when the notice is given: s 139K.
9. The operation and effect of a notice given under s 139ZQ was considered by the High Court in Vale. A bankrupt wife transferred her interest as a joint tenant in certain properties to her husband for nominal consideration prior to the commencement of the bankruptcy. It was accepted that the transfer was void under s 120 of the Act: see Vale at [29]. The Official Receiver gave a notice under s 139ZQ to the husband, in which it was stated that the properties had been valued at $540,000 prior to the transfer, and requiring payment by the husband of an amount of $270,000. The trustee commenced proceedings to recover the debt, and the husband applied for an order under s 139ZS setting aside the notice (at the time, there was no time limit on making such an application). There was a dispute between the parties as to the amount claimed by the notice, raising a question as to the valuation of the properties at the relevant time.
10. The controversy in Vale concerned an issue of construction in relation to ss 139ZQ and 139ZS. The appellant husband argued that the amount claimed by the trustee formed part of "the alleged facts and circumstances set out in the notice" for the purposes of s 139ZS(1), so that an error in that amount would enable the notice to be set aside by the Court: Vale at [17]. The trustee, on the other hand, advanced a series of propositions to the effect that an error in the amount specified for payment (as an amount equal to the money or the value of the property received) did not render the notice liable to attack on the ground in s 139ZS(1) (that Subdiv J did not apply to the person on the basis of the alleged facts and circumstances set out in the notice): Vale at [16]. This was because the alleged facts and circumstances set out in the notice pursuant to s 139ZQ(2) did not include the specification of any particular sum of money or value of property received as a result of the void transaction, so "any dispute as to the accuracy of the amount to be paid to the Trustee is to be resolved in proceedings to recover the debt or to enforce the charge": ibid.
11. The High Court accepted the construction of s 139ZS for which the trustee contended: Vale at [26]. In reaching this conclusion, the Court stated (at [23]):

[Section] 139ZS does not provide the means for the determination of a dispute, not as to the engagement of the avoidance provision, here s 120, but as to the amount payment of which is required by the notice. Such disputes are to be resolved in proceedings to recover the debt or enforce the charge.

1. This appears to contemplate that, in debt recovery proceedings brought under s 139ZQ(8), it would remain open to dispute the amount that is equal to the money or the value of the property received as result of the void transaction, and that the amount claimed in the notice would not necessarily be conclusive as to the amount payable to the trustee under s 139ZQ. Notwithstanding that the Court (at [21]) regarded s 139ZQ(8) as requiring "treatment as a liquidated sum of an amount claimed by the trustee as being equal to the value received", it was accepted (at [24]) that "[i]n an action by the Trustee to recover that amount as a debt, the appellant would be at liberty to establish such matters of fact, from which the liability was alleged to arise, as were disputed". The Court also suggested (at [25]) that this would provide a defence to criminal proceeding under s 139ZT for refusal or failure to comply with a notice under s 139ZQ, in so far as it would not be an offence to fail or refuse to pay "that which could not have been recovered in full by civil action pursuant to s 139ZQ(8)".
2. The outcome in Vale was that the Federal Magistrate had erred at first instance in setting aside the notice, not because the valuation or the amount claimed in the notice was correct, but because any error in the amount to be paid under the notice was not a ground on which the notice could be set aside under s 139ZS: Vale at [44]. Nevertheless, the trustee accepted that the amount sought to be recovered from the appellant should be reduced to reflect the value of the properties at the relevant time: Vale at [50]-[53]. Accordingly, the trustee sought "to be in the position that would have applied if he had provided the Official Receiver with direct evidence of the value of the properties in question at the date of the notice": Vale at [53]. In the light of this concession, it was unnecessary for the High Court to remit the question of the amount payable for determination by the Federal Magistrates Court, other than in relation to the award of interest. It is implicit in the orders made by the High Court that the amount payable under s 139ZQ(1) was a question to be determined on the evidence in the debt recovery proceedings brought by the trustee under s 139ZQ(8).
3. The appellant sought to distinguish Vale by confining the decision to its particular facts, in which the dispute was concerned with the accuracy of a valuation of the property transferred and the quantum of the amount that was claimed in the notice given under s 139ZQ. In contrast, the appellant submitted that the present case involved a "more fundamental" question as to whether or not Subdiv J applied to the appellant at all based on the alleged facts and circumstances set out in the Notice, in circumstances where it had been drawn to the attention of the Official Receiver before the Notice was given that those facts and circumstances were disputed or challenged by the appellant. In this regard, the appellant relied on the decision of the Federal Circuit Court of Australia (as it then was) in Tsakirakis.
4. For the reasons set out above in relation to Grounds 1 and 2, the payment of money by Mr Vlahos to the appellant was properly regarded as a transfer of property for less than market value consideration, and a transaction that was void against the Trustee under s 120 of the Act. Accordingly, the primary judge correctly found that Subdiv J applied to the appellant, on the basis of the alleged facts and circumstances set out in the Notice. Any dispute about the amount payable to the trustee under s 139ZQ did not provide a ground on which the Notice could be set aside under s 139ZS, but rather was an issue to be agitated and resolved in any subsequent debt recovery proceedings brought by the Trustee under s 139ZQ(8) or, possibly, any criminal proceedings for an alleged offence under s 139ZT. This would potentially encompass any defences that might be available to the appellant under equitable principles to meet any demand for the repayment of the money for the benefit of Mr Vlahos' bankrupt estate.
5. The fact that the Official Receiver was made aware that the appellant disputed the alleged facts and circumstances on which it was claimed that the transaction was void against the Trustee does not itself establish that the decision to give the Notice was inappropriate or otherwise affected by reviewable error. As discussed above, the purpose of Subdiv J is to establish an administrative mechanism to facilitate the recovery of property by a trustee in bankruptcy, with a view to encourage the saving of costs: see also Vale at [22]. If there is a dispute about whether the transaction is void against the trustee under an applicable provision in Div 3 of Part VI, such a dispute is not susceptible of resolution by the Official Receiver, but must ultimately be determined by a court in appropriate proceedings. At least where there is sufficient evidence on which to consider that the transaction is void against the trustee, the Official Receiver may give a notice requiring the person to pay the money or the value of the property received, and the person can challenge the facts and circumstances on which the notice is based by bringing an application to set aside the notice under s 139ZS, or by disputing the debt in any proceedings brought by the trustee under s 139ZQ(8).
6. In this regard, the primary judge was correct to distinguish the decision in Tsakirakis: see J [130]-[132]. In that case, Lloyd-Jones J held that a decision made by the Official Receiver to give a notice under s 139ZQ amounted to an abuse of process. At the time that the notice was given by the Official Receiver, there was already a proceeding on foot in which the applicant had sought an order to set aside a previous notice under s 139ZQ (which was subsequently revoked), and the trustee had filed a cross-claim seeking relief under ss 120 and 121 of the Act: Tsakirakis at [66]. It appears that the trustee, feeling aggrieved by the revocation of the first notice, had pressed the Official Receiver to give another notice under s 139ZQ in order to create a cause of action for recovery of the debt: see Tsakirakis at [52]-[60], [78]-[79].
7. In those circumstances, the applicant brought a fresh proceeding in which he sought review under ss 15(5) and 30 of the Act of the decision by the Official Receiver to give the second notice under s 139ZQ. The basis on which the decision was challenged was that the delegate had failed to have due regard to the existence of the claim made by the trustee and "the identical subject matter in then existing proceedings" in the Federal Magistrates Court: Tsakirakis at [12]. This encompassed an allegation that the second notice was issued for an improper purpose of exerting pressure on the applicant and giving the trustee an "advantage" in the pending proceedings: Tsakirakis at [12], [21], [49]. Thus, the applicant claimed "that it was an abuse of process for the Official Receiver to issue a s.139ZQ notice because it directly or indirectly sought to interfere with the proper conduct of claims by the Trustee which are already before the Court in the earlier ... proceedings": Tsakirakis at [23].
8. The applicant in Tsakirakis argued that, because any determination whether or not a transfer was void against the trustee was required to be made by a court, it was inappropriate for the Official Receiver to issue a notice under s 139ZQ once the trustee had brought proceedings for relief in relation to a transfer that was alleged to be void under Div 3 of Part VI of the Act: Tsakirakis at [28]. The matter was further complicated by the fact that, in the period between the first and second notices, the trustee introduced a new claim of fraudulent behaviour by the applicant, which changed "the basis of the original material tendered in support of the initial notice": Tsakirakis at [85].
9. Judge Lloyd-Jones considered (at [85]) that the cross-claim was "no longer something that can be addressed by an administrative decision maker": Tsakirakis at [85]. His Honour noted that, before giving the second notice, the Official Receiver "had been furnished with a letter from [the applicant's solicitor] challenging the basis of the claim that the transfer of the [property] was actually void, together with the filing of a cross-claim by the Trustee himself seeking a declaration that the transfer was void": Tsakirakis at [93] (emphasis added). Those intervening events had put the Official Receiver on notice that the sufficiency of the material provided in support of the initial notice under s 139ZQ was now being "challenged" or "questioned" or "put in doubt": Tsakirakis at [94]-[95].
10. In particular, Lloyd-Jones J relied on the fact that "[a]t the time of the making of the decision to issue the second notice proceedings to determine that question had been initiated and filed in this Court": Tsakirakis at [95]. His Honour took the view that, "[f]or an abundance of caution", the Official Receiver should have delayed giving the second notice until the questions raised in those proceedings had been resolved: ibid. This conclusion appears to have been reached on the basis that, on the material before the Court, the Official Receiver could not be satisfied "that the Trustee had provided evidence of a void transfer sufficient to allow the exercise of the discretion": ibid.
11. Accordingly, Lloyd-Jones J in Tsakirakis made an order setting aside the second notice given under s 139ZQ, stating (at [98]):

In the matter the before this Court, I am not satisfied that the circumstances have established that the authority [conferred by s 139ZQ] should have been exercised, because of the intervening events that put the material advanced in support of the issue of the first s.139ZQ notice now being in doubt. That doubt needs to be resolved by a judicial hearing that is addressed in proceedings SYG 1469 of 2012 and referred to as the cross-claim.

The order setting aside the notice was not made under s 139ZS, and the Court did not make a finding whether or not Subdiv J applied to the applicant on the basis of the alleged facts and circumstances set out in the notice. Rather, it appears that the Court was exercising its powers to review the acts or decisions of the Official Receiver and to make such orders as were considered necessary for the purposes of carrying out or giving effect to the Act.

1. The appellant submitted that the decision in Tsakirakis is directly applicable to the present case, in so far as the Official Receiver was made aware before giving the Notice that the appellant challenged the basis on which it was alleged that the transfer of property from Mr Vlahos was void under s 120 of the Act. However, the situation that arose in Tsakirakis is a far cry from the facts of the present case. In Tsakirakis, the Official Receiver had issued a previous notice under s 139ZQ, which had been revoked after proceedings were brought in the Federal Magistrates Court in which the parties joined issue on the question whether the transfer of property was void against the trustee. In the present case, while the Trustee was aware from correspondence that the appellant disputed the alleged facts and circumstances set out in the Notice, there was nevertheless sufficient evidence on which the Official Receiver could consider that the transaction was void against the Trustee for the purposes of giving a notice under s 139ZQ. The appellant was entitled to make an application to set aside the Notice under s 139ZS, upon which there would be a judicial determination whether Subdiv J applied to the appellant on the basis of the alleged facts and circumstances set out in the Notice, including the question whether the transfer of property to the appellant by Mr Vlahos was void against the Trustee under s 120 of the Act.
2. The appellant submitted that it had been open to the Trustee to commence a proceeding to obtain relief in respect of a void transfer of property under s 120 of the Act and that, in circumstances where the Official Receiver was aware that the facts and circumstances were in dispute, the Trustee ought to have been required to bring such a proceeding rather than taking advantage of the administrative enforcement mechanism provided under Subdiv J. However, this does not demonstrate that the decision by the Official Receiver to issue a notice under s 139ZQ was an abuse of process or otherwise involved reviewable error. A notice given under s 139ZQ might precipitate an application to set aside the notice under s 139ZS, or might be a prelude to contested debt recovery proceedings under s 139ZQ(8). The anticipation of such proceedings does not deny the availability of the power conferred by s 139ZQ, provided that the Official Receiver forms the requisite state of mind that the person to whom the notice is given has received money or property as a result of a transaction that is void against the trustee under Div 3 of Part VI. That involves an administrative decision which does not finally determine whether the transaction is void against the trustee. In that context, the Official Receiver is not required to adjudicate on any dispute between the parties in relation to the facts and circumstances because of which he or she considers that the transaction is void against the trustee.
3. It follows that the primary judge did not err in concluding that the appellant's foreshadowed challenge to the Trustee's claim that the transfer of property was void under s 120 of the Act did not itself require the Official Receiver to refrain from issuing the Notice under s 139ZQ.
4. The appellant also argued that primary judge erred in failing to set aside or review the Notice in circumstances where, on her Honour's findings, the Notice contained and required payment by the appellant of a "significantly incorrect amount of money". This was premised on the appellant's argument that "he should not have to pay the amounts he received from Mr Vlahos to the [T]rustee because [he] distributed any sums he received from Mr Vlahos to his own syndicate members prior to the commencement of Mr Vlahos's bankruptcy": J [77]. The primary judge accepted that premise, both in relation to the remedies available to the Trustee against the appellant (J [99]) and the amount payable by the appellant under s 139ZQ (J [123]-[124]). However, those conclusions were unnecessary to her Honour's ultimate decision that the Notice could not be set aside under s 139ZS or reviewed under s 15(5) of the Act on the ground that it contained an incorrect amount.
5. The "list of issues in dispute" filed by the parties below included the question "[w]hether section 120 of the [Act] permits the Trustee to recover money from the [appellant] where the property, namely the money he received from [Mr Vlahos], is no longer in the [appellant's] hands", as well as the question whether there were "sufficient grounds for the Official Receiver to issue the Notice": J [18]. However, it was not necessarily common ground before the primary judge that these issues were relevant to the resolution of the proceedings: J [18].
6. Section 120 was introduced in its current form by the Bankruptcy Legislation Amendment Act 1996 (Cth). Whereas the provision previously applied to "settlements of property", which had been interpreted to refer to dispositions made with the intention that the recipient would retain the property, s 120 as amended is applicable to a "transfer of property", which is expressly defined to include a payment of money. Accordingly, s 120 of the Act can apply to a payment of money by a person who later becomes a bankrupt, irrespective of whether or not it is intended that the money be retained by the payee: see generally Anscor at [29]-[31] (Lindgren J); cf. [1]-[2] (Wilcox and Moore JJ).
7. While s 120 operates to avoid a transfer of property as against the trustee, at least from the time of commencement of the bankruptcy, it does not itself create or provide for any particular remedy as a result of that avoidance. Rather, the remedies available to the trustee are governed by the general law, including equitable principles, subject to the specific provisions of the Act (including s 120(4), (6) and s 123): cf. Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372 at 426-427 (Wilcox and Cooper JJ). In that context, s 30 of the Act recognises the Court's power to decide all questions of law or fact, and to make such orders including declarations, injunctions or other equitable remedies as are considered necessary to give effect to the avoidance of a transfer of property as against the trustee under s 120.
8. The remedies available to a trustee in bankruptcy in respect of a void transaction can include proprietary remedies in relation to the property that was transferred by the bankrupt, either in the hands of the transferee or against a third party who was not a bona fide recipient for value (as to the latter, see s 120(6) of the Act), or in relation to other property into which the proceeds of the transferred property may be traced: see e.g. Anscor at [43(g)-(j)] (Lindgren J). However, such remedies may not be available in circumstances where the property has been dissipated or consumed by the transferee before the transfer was avoided by s 120, or has been transferred to a person who acquired the property in good faith for consideration that was at least as valuable as the market value of the property.
9. A notice under s 139ZQ, on the other hand, creates a personal liability to pay to the trustee an amount equal to the money or the value of the property received as a result of a void transaction: see Anscor at [43(d)] (Lindgren J). The amount payable is specified in s 139ZQ(1), and is ultimately subject to judicial determination in any proceedings brought by the trustee to enforce the debt. While the liability created by a notice under s 139ZQ is supported by a charge imposed by s 139ZR over the relevant property, it remains a personal liability of the person to whom the notice is given.
10. For the purposes of this appeal, it is unnecessary to determine whether or not the amount stated in the Notice was "significantly incorrect". To the extent that there might be any defences available to the appellant in debt recovery proceedings arising from the fact that the money had been distributed by him to third parties prior to the commencement of the bankruptcy, such questions are outside the scope of the present proceedings. They have no bearing on the validity of the Notice. The existence of any dispute about the amount payable under s 139ZQ does not provide a basis on which the Notice should be reviewed or set aside.
11. Accordingly, Ground 4 is dismissed.

1. The Trustee's notice of contention arises from the primary judge's conclusions:

(a) first, that the funds paid to the appellant by Mr Vlahos could not be recovered by the Trustee from the appellant in circumstances where they had been distributed to third parties prior to the commencement of the bankruptcy, and could not be traced into any property owned by the appellant (J [109]); and

(b) second, that s 139ZQ(1) should be construed as limited to the recovery of the money or the value of the property that would have been recoverable in proceedings brought under s 120 of the Act, by reading the words "as a result of a transaction that is void against the trustee" as meaning "as a result of a transaction to the extent that is void against the trustee" under Div 3 of Part VI (J [123]) (emphasis in original).

1. In circumstances where the appellant has not established any of his grounds of appeal, and the primary judge's observations on these issues did not affect the orders made below dismissing the application, it is unnecessary to consider the grounds set out in the notice of contention. This approach is consistent with principles of judicial economy: see generally Boensch v Pascoe [2019] HCA 49; (2019) 268 CLR 593 at [7]-[8] (Kiefel CJ, Gageler and Keane JJ), [101] (Bell, Nettle, Gordon and Edelman JJ). While there may be some potential overlap with Ground 4(b) of the appeal (in so far as the appellant argued that the Notice was invalid or should be set aside on the ground that it required payment of "a significantly incorrect amount of money"), the primary judge correctly concluded (at J [136]) that this was not a sufficient reason to set aside the Notice in the light of the High Court's decision in Vale.
2. Nevertheless, while refraining from embarking on a consideration of such issues, we should not be taken to have endorsed the primary judge's construction of s 139ZQ, nor to foreclose future argument about the amount that is properly recoverable from the appellant.

1. The appellant has not established any of his grounds of appeal. Accordingly, the orders made by the primary judge were not affected by error, and the appeal should be dismissed with costs.

I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Snaden, Horan and Dowling.