A voluntary transfer?
61 The question whether Mr Gruber's transfer of his interest in the Ramsgate property was for valuable consideration or voluntary, is relevant in two ways. First, as I have indicated, in determining whether an alienation has occurred with intent to defraud creditors, the Court takes into account whether the alienation was voluntary or for value, and is more willing to find a dishonest intention where the transfer is voluntary. Secondly, the defence in s 37A(3) is available only to a 'purchaser', defined in s 7 of the Conveyancing Act to mean a person who acquires an interest in or charge on property for money or money's worth. Therefore, if the transfer by Mr Gruber was voluntary, and the ingredients of subsection (1) are made out, Mrs Gruber has no defence.
62 Mrs Gruber submits that the transfer was for valuable consideration. She says that the transfer was one element of a settlement of property and spouse maintenance rights under the Family Law Act. Other elements included the orders with respect to the Nissan van, the proceeds of the joint bank account, the furniture, and Mr Gruber's interest in the business known as Gruber Radio and TV. The settlement also provided that an amount of $50,000 of the value of Mr Gruber's interest in the Ramsgate property was to be attributable to the provision of spousal maintenance for Mrs Gruber by Mr Gruber. Mrs Gruber did not make any claim for maintenance for six years, and she says this was in reliance on the settlement in her favour.
63 On the face of it, the transfer was part of a settlement under the Family Law Act and there were elements of valuable consideration supplied by Mrs Gruber in the overall settlement arrangements. But Ms Langdon says that the property settlement, and the consent orders reflecting it, were obtained by material non-disclosure, or by concealment of a material fact from the Local Court. This is because the application stated that there were no proceedings pending against the parties, and the supporting documents signed by the parties did not disclose the Canadian civil proceedings. Therefore, says Ms Langdon, the property settlement was a sham or a device to conceal the purpose and intention of Mr Gruber, shared by his wife, to defeat Ms Langdon's claim.
64 In support of this submission, Ms Langdon says that the relationship between Mr and Mrs Gruber had not broken down and they had no reason to make a property settlement at that time; and that their intention was to continue to reside in the property as soon as Mr Gruber was released from gaol. Mr and Mrs Gruber did not, according to Ms Langdon, act on the consent orders except by transfer of the property to Mrs Gruber. In fact, Ms Langdon says, Mrs Gruber acted inconsistently with the consent orders by not dividing the furniture and by selling the Nissan van. The effect of the settlement, says Ms Langdon, was that Mr Gruber was left with no substantial assets from which to meet Ms Langdon's claim.
65 It cannot be said, in my view, that the Local Court orders were a mere sham. Orders of a Local Court are valid unless set aside (Local Court (Civil Claims) Act 1970 (NSW) s 69 (1)), and generally speaking, it is for the Local Court rather than this Court to set aside its orders, in the absence of any appeal or case for certiorari: Silvera v Savic , at 139-140. As long as the Local Court orders stand, it cannot strictly be said that the transfer was a voluntary transfer.
66 However, it is established by the evidence, in my view, that the provisions of the Local Court orders other than for the transfer of property were not implemented. Mr Gruber has in fact received nothing in exchange for the transfer of his interest in the Ramsgate property. I accept Ms Langdon's submission that the evidence shows that the orders with respect to the Nissan van, the furniture and the bank account have not been implemented at all. Nothing has been done about Mr Gruber's business, which always belonged to him but became virtually valueless (apart from some minor items of equipment) once he was sent to gaol. I do not accept that, had the property settlement not taken place, Mrs Gruber would have claimed, or recovered, any maintenance payments from Mr Gruber beyond what she in fact received through his use of their joint account to deposit his prison wages. Therefore, while the transfer was not strictly voluntary, Mr Gruber has not received any valuable consideration in respect of it, and there is no likelihood that he will do so.
67 That being so, my view is that while this is not strictly a case of voluntary transfer, the fact that no consideration has been received by Mr Gruber for the transfer is highly relevant to the determination of whether there was an intent to defraud. On the other hand, my opinion is that Mrs Gruber was a 'purchaser' because the property settlement consented to by the parties and implemented in the Local Court orders involved executory consideration on her part.