Official Trustee in Bankruptcy v Mateo

Bankruptcy Act 81 Section 121 of the Bankruptcy Act, which was inserted into the Act in its present form in 1996, is concerned to avoid transfers of property made with an intention to defeat creditors. The section relevantly provides: '121(1) A transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee) is void against the trustee in the transferor's bankruptcy if: (a) the property would probably have become part of the transferor's estate or would probably have been available to creditors if the property had not been transferred; and (b) the transferor's main purpose in making the transfer was: (i) to prevent the transferred property from becoming divisible among the transferor's creditors; or (ii) to hinder or delay the process of making property available for division among the transferor's creditors. (2)The transferor's main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent. (3)Subsection (2) does not limit the ways of establishing the transferor's main purpose in making a transfer. (4)Despite subsection (1), a transfer of property is not void against the trustee if: (a) the consideration that the transferee gave for the transfer was at least as valuable as the market value of the property; and (b) the transferee did not know that the transferor's main purpose in making the transfer was the purpose described in paragraph (1)(b); and (c) the transferee could not reasonably have inferred that, at the time of the transfer, the transferor was, or was about to become, insolvent. (5)The trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee. (6)For the purposes of subsections (4) and (5), the following have no value as consideration: (a) the fact that the transferee is related to the transferor; (b) if the transferee is the spouse or de facto spouse of the transferor - the transferee making a deed in favour of the transferor; (c) the transferee's promise to marry, or to become the de facto spouse of, the transferor; (d) the transferee's love or affection for the transferor. … (9)For the purposes of this section: (a) transfer or [sic] property includes a payment of money; and (b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and (c) the market value of property transferred is its market value at the time of the transfer.' 82 Section 139ZQ of the Bankruptcy Act relevantly provides: '139ZQ(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 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. … (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.'

The power of the Court to set aside a notice given under s 139ZQ derives from s 139ZS which provides:

'139ZS(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. (2) A notice that has been set aside is taken not to have been given.'

order of the family court 83 The order of the Family Court with which this appeal is concerned was made by consent. It includes the following terms: 'BY CONSENT THE COURT ORDERS THE FOLLOWING: 1. ORDER that within twenty-eight (28) days from the date of these orders the husband shall transfer to the wife all his rights, titles and interests in the matrimonial home known and situate at 3 Coolibah Street, Merrylands West, in the State of New South Wales, being the whole of the land comprised in Folio Identifier 14/806113. 2. ORDER that the husband shall not do any act matter or deed whereby a caveat charge or other encumbrance is or maybe registered on the said matrimonial home from the date hereof. 3. ORDER that upon the transfer to the wife of the husband's rights title and interests in the abovenamed matrimonial home the wife shall be responsible for all outgoings on the matrimonial home including mortgage repayments, council and water rates, insurance, and the wife shall indemnify and keep indemnified the husband in respect of any claims for loss damages or any other claims otherwise arising in respect of the said matrimonial home. 4. ORDER that upon the signing of this document, the wife shall pay the husband the sum of THREE THOUSAND ($3,000.00) DOLLARS. 5. ORDER that upon the husband signing of the Transfer document as indicated in paragraph "1" hereof, the wife shall pay the husband the sum of SEVEN THOUSAND ($7,000.00) DOLLARS. 6. ORDER that upon the sale of the matrimonial home at the end of this calendar year (i.e. 31 December 2000), the wife shall pay the husband an additional amount of $90,000.00 to be paid as follows: $10,000.00 to the husband; and $80,000.00 to be paid to the three children of the marriage at the direction of the husband. 7. ORDER that SHOULD the matrimonial home not be sold by the end of this financial year [sic],i.e. 31 December 2000, the wife shall pay the husband the sum of TEN THOUSAND ($10,000.00) DOLLARS as referred to in paragraph "6" hereof, not later than 31 December 2000. In this regard the wife shall preserve the entitlements of the three children of the marriage pursuant to paragraph "6" above, and shall pay to the children equally such amount, being $80,000.00 or amount equal to one-third of the net value (being the sale price less any mortgage, commission, and legal costs and disbursements related to the sale) of the matrimonial home at the date of sale, whichever is the greater amount. … 14. In the event that the husband or the wife refuses and/or neglects to execute any documents or do anything required of them in relation to these orders then pursuant to Section 84 of the Family Law Act:- The Registrar of the Family Court of Australia at Sydney is hereby appointed to execute all deeds and documents in the name of the party in default and do all acts and things necessary to give validity and operation to the said order and: 15. The Court notes that pursuant to Section 81 of the Family Law Act 1975 the parties intend that these Orders as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.'

consideration 84 Jurisdiction under ss 79 and 79A of the Family Law Act may be exercised by courts other than the Family Court of Australia (see s 39 of the Family Law Act and s 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)). However, for present purposes it is convenient to refer to a court exercising jurisdiction under ss 79 and 79A of the Family Law Act as 'the Family Court'. 85 Section 79 of the Family Law Act is not concerned to give the Family Court power to declare the title or rights that a party to a marriage has in respect of property. The Family Court derives that power from s 78 of the Family Law Act. Section 79 empowers the Family Court to alter the interests of the parties to a marriage in property. 86 The power of the Family Court to alter the interests of the parties in property is a wide one and extends to the making of orders requiring a party to a marriage to make, for the benefit of either or both of the parties or a child of the marriage, such settlement or transfer of property as the court determines. 87 The factors which the Family Court may take into account in considering what order, if any, should be made under s 79 are extensive. They include the financial or other contribution made directly or indirectly by or on behalf of a party to a marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them. The factors also include the contribution made by a party to the marriage to the welfare of the family including any contribution made in the capacity of homemaker or parent. Additionally, the factors include the matters referred to in s 75(2) of the Family Law Act as matters to be taken into consideration in relation to spousal maintenance so far as they are relevant. These matters include the age, health, financial resources and support responsibilities of the respective parties to the marriage and also the need to protect a party 'who wishes to continue that party's role as a parent'. 88 The Family Court can grant an adjournment in proceedings under s 79 where there is likely to be a significant change in the financial circumstances of the parties to a marriage or either of them. There seems to be no reason to doubt that bankruptcy, or even insolvency, would constitute a significant change in financial circumstances within the meaning of the section. 89 Importantly, the Family Court may not make an order under s 79 of the Family Law Act unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. As Gibbs CJ observed in Mallet v Mallet (1984) 156 CLR 605 at 609: '… It is necessary for the court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case.'

'… The section contemplates that an order will not be made unless the court is satisfied that it is just and equitable to make the order (s 79(2)), after taking into account the factors mentioned in (a) to (e) of s 79(4). The requirement that the court "shall take into account" these factors imposes a duty on the court to evaluate them. …'

90 The extent to which the Family Law Act gives the Family Court power to make orders adversely affecting third parties was considered by the High Court in Ascot Investments Proprietary Limited v Harper (1981) 148 CLR 337 ('Ascot Investments'). By majority (Barwick CJ, Gibbs, Stephen, Mason, Aickin and Wilson JJ, Murphy J dissenting) the High Court held that the Family Court had no power to direct a company or its directors to register a transfer of shares from one party to a marriage to the other where the memorandum and articles of association of the company empowered the directors to decline to register a transfer of shares and the shareholder party did not control the company. Barwick CJ at 342 said: 'It may at once be conceded that the Family Court may make orders which are appropriate to render effective orders made by it within its jurisdiction. Such enforcing orders must, of course, do no more than is necessary and appropriate for the enforcement of the substantive order or orders. They cannot directly affect the rights of third parties. But it is no objection to such an enforcing order that it binds or operates upon a stranger to the Family Court proceedings or that compliance with it may indirectly or consequentially effect substantive rights of the stranger. …' 91 Gibbs J, with whom Stephen, Aickin and Wilson JJ agreed, at 354 observed: '…It can safely be assumed that the Parliament intended that the powers of the Family Court should be wide enough to prevent either of the parties to a marriage from evading his or her obligations to the other party, but it does not follow that the Parliament intended that the legitimate interests of third parties should be subordinated to the interests of a party to a marriage, or that the Family Court should be able to make orders that would operate to the detriment of third parties. There is nothing in the words of the sections [i.e. s 80 which confers general powers on the court concerning property and spousal maintenance and s 114 which empowers the court to grant injunctions] that suggests that the Family Court is intended to have power to defeat or prejudice the rights, or nullify the powers, of third parties, or to require them to perform duties which they were not previously liable to perform. It is one thing to order a party to a marriage to do whatever is within his power to comply with an order of the court, even if what he does may have some effect on the position of third parties, but it is quite another to order third parties to do what they are not legally bound to do. If the sections had been intended to prejudice the interests of third parties in this way, it would have been necessary to consider their constitutional validity.' 92 Having regard to the reference made by Gibbs J to the possibility of an order of the Family Court having 'some effect on the position of third parties', it would seem that his Honour's earlier reference to 'orders that would operate to the detriment of third parties' should be understood in the light of the words which immediately follow them. That is, the type of 'detriment' to which his Honour was referring would seem to be the defeating or prejudicing of rights, the nullification of powers or the creation of fresh legal obligations. Read this way, there would seem to be no conflict between the approach adopted by Gibbs J and that adopted by Barwick CJ in the passages set out above. 93 In my view, Ascot Investments is authority for the proposition that the Family Court has the power to make an order which reflects the obligations of the parties to a marriage, the one to the other and to the children of the marriage, notwithstanding that such order may affect the position of a third party (eg, by reducing the property available to unsecured creditors should a sequestration order be later made against the estate of one of the parties to the marriage). This is not to say that, in making an order under s 79 of the Family Law Act, the Family Court may disregard the interests of third party creditors. Indeed, in an ordinary case, the Family Court may be expected to be astute to prevent the claims of an unsecured creditor from being defeated by a s 79 order. However, it seems to me that the Family Court has the power, having considered both the legitimate interests of an unsecured creditor of one of the parties to the marriage and the legitimate interests of the other party to the marriage, whose interests may incorporate or reflect the interests of a child of the marriage, to make an order the indirect or consequential effect of which will be to reduce the assets to which the unsecured creditor may look should its debt not otherwise be satisfied. 94 This seems to be the approach in fact adopted by the Family Court. The Full Court of the Family Court (Nicholson CJ, Ellis and Buckley JJ) in In the Marriage of Biltoft (1995) 19 Fam LR 82 at 91-92 observed: 'A general practice has developed over the years that, in relation to applications pursuant to the provisions of s 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities. In the case of encumbered assets, the value thereof is ascertained by deducting the amount of the secured liability from the gross value of the asset. See, Ascot Investments Pty Limited v. Harper (1981) 148 CLR 337 where Gibbs J (as he then was) pointed out at page 355 that the Court "must take the property of a party to a marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it." Where the assets are not encumbered and moneys are owed by the parties or one of them to unsecured creditors, the court ascertains the value of their property by deducting from the value of their assets the value of their total liabilities, including the unsecured liabilities. See In the marriage of Prince, General Credits Australia Limited (Intervenor); A-G for the State of Queensland (Intervening); A-G for the Commonwealth of Australia (Intervening) (1984) 9 Fam LR 481; [1984] FLC 91-501, Evatt CJ at Fam LR 486; FLC 79,076 said: "… the outcome of the wife's application will depend upon findings made by the Court as to the parties' assets and liabilities, their contributions and their respective financial resources, means and needs. It would be necessary for the Court to determine so far as is possible the value of the property held by each party. In accordance with the usual practice this would be done by deducting the value of outstanding mortgages, debts, and other liabilities (eg Albany (1980) 6 Fam LR 461 at 466; [1980] FLC 90-905 at 75,717). The court may have to determine, as between the parties, the existence of a particular liability (Af Petersens (1981) 7 Fam LR 402; [1981] FLC 91-095). The assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases. While some liabilities are charges upon the property which can be accurately assessed at a certain date, others are at large, or have not been precisely determined, eg tax liabilities: Kelly (1981) 7 Fam LR 762 at 767; [1981] FLC 91-108 at 76,801. In some cases the amount of the liability can only be estimated generally: Albany (supra at Fam LR 466; FLC 75,717. The Court can make an allowance for a particular liability if appropriate to do so. In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (eg a loan from a parent of the party not likely to be enforced; Af Petersens, supra; Quirk (1983) unreported). In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under s 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party's potential entitlement under s 79: Kimber (1981) 7 Fam LR 483; [1981] FLC 91-085; Kowaliw [1981] FLC 91-092; Antmann (1980) 6 Fam LR 560; [1980] FLC 90-908; Af Petersens, supra. Complex issues can arise in regard to liabilities to third parties: see eg Pockran and Crewes (1983) 8 Fam LR 893; [1983] FLC 91-311. Of course, the Court cannot ignore the fact that there is or may be a liability; the effect is simply that it does not consider that the other spouse should be called upon to in effect "contribute" to the liability by having that spouse's fair share in the parties' property reduced by virtue of its existence. The effect may be that the party who has incurred the liability will be left to meet it out of whatever funds remain to that party after satisfying the property order made under s 79; Af Petersens, supra."' 95 Further, the Full Court of the Family Court in In the Marriage of Biltoft at 94 referred with apparent approval to the following passage from Semmens v Commonwealth (1989) 13 Fam LR 715: 'Whilst we think it inappropriate, in the absence of Rules of Court to this effect, to require notices to be given to third parties in all such circumstances, it must be recognised that the failure to do so in particular cases can severely impinge upon the "legitimate interests of third parties" and may almost inevitably in many cases constitute a "miscarriage of justice" within s 79A. Consequently, in our view, where in a proceeding under ss 79, 86 or 87 it appears to either of the parties that there are interests of third parties which might be adversely affected by the orders which are being sought or the terms of the agreement, justice and common sense dictate that those third parties be given notice. Similarly, where the Court becomes apprised of that circumstance in the course of hearing such a proceeding, that procedure would also commend itself. Failure to do so in a particular case may adversely affect the interests of a third party and, in the long run, may open up the orders which have been made or the agreement which has been approved or registered to challenge ss 79A and 87(8) or otherwise.' 96 The complexities identified by the Full Court of the Family Court in In the Marriage of Biltoft are not avoided by the parties seeking a consent order under s 79 of the Family Law Act. As Brennan J pointed out in Harris v Caladine (1991) 172 CLR 84 at 104, the Court must consider 'the propriety of the provisions with respect to financial matters' and '[t]he making of a consent order in a s 79(1) matter is not automatic'. 97 Moreover, s 79A of the Family Law Act authorises the variation or setting aside of an order under s 79 on the application of 'a person affected by the order'. The Family Court has a discretion to vary or set aside the order if it is satisfied that there has been 'a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance'. The expression 'a person affected by the order' has a wide meaning in this context. In Deputy Commissioner of Taxation (WA) v Spanjich (1988) 88 ATC 4985 the Full Court of the Family Court (Barblett DCJ, Simpson and Connor JJ) at [18] observed: 'The real question is whether if the effect of the order is to prevent the Deputy Commissioner from recovering tax due and owing is he thereby a person affected. In our opinion the "affect" may have relation to something more than strict legal rights and include the practical effect of the order on the recovery of monies due and owing in the circumstances of this case. …' Similarly, the expressions 'suppression of evidence' and 'any other circumstance' have been widely interpreted and extend to a party to a marriage failing to disclose his or her true financial circumstances (Pelerman v Pelerman [2000] Fam CA 881; 26 Fam LR 505). 98 Thus, even where an order under s 79 is made by consent, it is open to the Family Court to vary or set aside the order where it is satisfied that there was a miscarriage of justice which affected a third party creditor because full and frank disclosure of all relevant facts and circumstances was not made to the court when it approved the consent order. As mentioned above, relevant circumstances include the significant financial liabilities and obligations to third parties of each of the parties to the marriage. 99 In summary, even where the parties to a marriage seek an order by consent in the Family Court under s 79 altering their interests in property, the court has a duty to satisfy itself that the order sought is just and equitable in all of the circumstances. The relevant circumstances include the liabilities, including the unsecured liabilities, of each of the parties to the marriage. A failure to give notice to a significant unsecured creditor of either of the parties to the marriage of the application for the order would be likely to constitute a ground for an application under s 79A to vary or set aside any order made. A disregard by the court of the proper interests of an unsecured creditor who appeared on an application under s 79 would be likely to constitute a ground of appeal against any order made. For these reasons it would be wrong to see s 79 of the Family Law Act as providing a means whereby the parties to a marriage, or either one of them, can defraud their creditors or the creditors of either of them. 100 It is crucial, in my view, to bear in mind the nature and extent of the powers vested in the Family Court by ss 79 and 79A in giving consideration to whether s 121 of the Bankruptcy Act, on its proper construction, is intended to reach to a transfer of property effected by, or made in compliance with, an order of the Family Court made under to s 79 of the Family Law Act. It seems to me that a number of factors suggest against s 121 being intended to have such an operation. 101 First, an order under s 79 cannot defeat the interests of a secured creditor as to do so would deprive a third party of an existing right, namely the right to look to his or her security in the event of non‑payment (see [90] above). However, nothing in the Family Law Act, or indeed the Bankruptcy Act, suggests that in determining what is 'just and equitable' within the meaning of s 79(2) of the Family Law Act the Family Court must as a matter of law prefer (as opposed to weigh in the balance) the interests of an unsecured creditor of one of the parties to the marriage to the interests of the other party and any children of the marriage. It is, in my view, unlikely that the legislature intended s 121 of the Bankruptcy Act to render void an order, or perhaps more likely, part of an order, of the Family Court calculated by the Family Court to achieve a proper balance between the competing interests of the parties to a marriage, the children (if any) of the marriage and third party creditors. 102 Secondly, s 79 of the Family Law Act authorises the making of an order 'altering the interests of the parties in … property.' That is, the section is concerned to empower the Family Court directly to alter the interests of the parties to a marriage in property, not merely to make an order requiring the parties or one of them to take steps which will result in their property interests being altered. An alteration of the interests of the parties to a marriage in property by court order does not, in my view, constitute '[a] transfer of property by a person … to another person' within the meaning of s 121(1) of the Bankruptcy Act (Kizon v Palmer (1997) 72 FCR 409 at 430-431 per Lindgren J with whom Jenkinson and Kiefel JJ agreed). Turning to the actual order made by the Family Court in this case (see [83] above), it seems to me that it is probably implicit in the terms of the order that the interests of the parties to the marriage in their matrimonial home were altered by operation of the order. That is, that the order itself vested in the wife all of the husband's beneficial interest in the matrimonial home (see Harris v Walker (1969) 14 FLR 167). On this view of the order, the transfer which paragraph 1 of the order required the husband to effect was necessary only to perfect the wife's interest by the transfer to her of the husband's legal interest in the matrimonial home. The transfer of the husband's beneficial interest in the matrimonial home to the wife was not on this view "[a] transfer of property by a person who later becomes a bankrupt…" within the meaning of s 121(1) of the Bankruptcy Act; it was a transfer of property by court order. 103 Even if the Family Court order is not so construed, in my view, the order necessarily destroyed the value of the husband's interest in the property. The order gave the wife an entitlement to have the whole of the husband's interest in the property transferred to her within twenty-eight days and, if necessary, the right to call on the Registrar of the Family Court to execute all necessary documents. For this reason the husband's remaining interest in the property was merely formal. The order restrained the husband in the meantime from charging or encumbering the title to the property (par 2 of the order). Although no argument was addressed to this Court in this regard, it would seem that the order vested in the wife an interest in the property sufficient to support the registration of a caveat on the title to the matrimonial home (In the Marriage of Pertsoulis (1979) 4 Fam LR 613; In the Marriage of Bourke (1993) 16 Fam LR 779). In these circumstances, at no time after the making of the Family Court order could it be said, in my view, that any interest in the matrimonial home 'would probably have become part of the [husband's] estate or would probably have been available to creditors if the property had not been transferred' within the meaning of s 121(1)(a) of the Bankruptcy Act. 104 The above analysis, in my view, reveals that both the nature of the power given to the Family Court by ss 79 and 79A of the Family Law Act and the language of s 121 of the Bankruptcy Act are inconsistent with a legislative intention that s 121 should have any operation in respect of an order made under s 79 of the Family Law Act including in respect of a transfer made pursuant to such an order. Rather, as it seems to me, the legislature intended that any failure by an order under s 79 of the Family Law Act properly to respect the interests of third party creditors should be addressed by an appeal to the Full Family Court or, in an appropriate case, by an application under s 79A of the Family Law Act to vary or set aside the order. 105 The learned primary judge proceeded on the basis that it was necessary to look at the 'overall transaction', of which the Family Court order was only part and that it was illegitimate to 'isolate one individual component of the transaction as in itself comprising the transfer'. His Honour concluded that the relevant 'transfer' for the purposes of the Bankruptcy Act: '… consisted of the whole transaction ranging from the signing of the Consent Orders on 18 April 2000 through to the completion of the transfer of the interest on or about 10 April 2000.' 106 In my respectful view, the approach adopted by his Honour pays insufficient regard to the fact that s 121 of the Bankruptcy Act is concerned only with '[a] transfer of property by a person who later becomes a bankrupt'. The very real discretion vested in the Family Court by s 79 of the Family Law Act, together with the obligation imposed on the Family Court by s 79(2) of the Family Law Act means, in my view, that the whole transactionfrom the signing of the consent orders to the completion of the transfer of the husband's interest in the matrimonial home to the wife cannot be regarded as having been effected by the husband. While it is unlikely that an identical order would have been made by the Family Court without the parties consent, the order made must be presumed to have been made because the Family Court was satisfied that 'in all the circumstances, it [was] just and equitable to make the order' (s 79(2)). That is, the order was made by the Family Court, not by the husband, notwithstanding that the consent of the parties, it may be assumed, was a significant factor leading to the Family Court's satisfaction. 107 At least one other difficulty, in my view, attends a construction of s 121 of the Bankruptcy Act which equates a transfer by or pursuant to a court order under s 79 of the Family Law Act as 'a transfer of property by a person … to another person' within the meaning of the section. Section 121(2) effectively deems the transferor's main purpose to be the purpose described in s 121(1) 'if it can reasonably be inferred … that, at the time of the transfer, the transferor was, or was about to become, insolvent.' Thus, were such a construction to be adopted, in any case in which it can reasonably be inferred that a party to a marriage was, or was about to become, insolvent as at the date of an order made under s 79 of the Family Law Act, all provisions of the order which altered the property interests of that party in favour of the other party would be rendered void against a trustee in bankruptcy by s 121(1) of the Bankruptcy Act - but, it would seem, no provisions operating in the opposite direction would be rendered void. As a consequence the total impact of the order could end up being quite different from that intended by the Family Court. One can readily envisage, for example, an order under s 70 which vested the matrimonial home in the wife for the benefit of herself and the children of the marriage but transferred to the husband all of the wife's interest in, say, a jointly held share portfolio. Should it prove to be the case that the husband was insolvent at the time of the order, the above construction of s 121 could lead to the result that the unsecured creditors of the husband would gain access to both the matrimonial home and the share portfolio in which the wife previously had an interest while the wife and the children of the marriage could be left destitute. Such an impact is not likely to be one which the Family Court would, or could, have been satisfied was just and equitable as required by s 79(2). 108 The legislature cannot, as it seems to me, have intended that this difficulty would be addressed by s 121(5) of the Bankruptcy Act which requires a trustee in bankruptcy to pay to the transferee 'an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee.' The complexity of the factors to which the Family Court must have regard before making an order, even a consent order, under s 79(1) of the Family Law Act renders the notion of the identification of the value of the 'consideration' given by a party to a marriage for any aspect of that order unrealistic. Moreover, as Wilcox J has pointed out, it is likely that the term 'consideration' is used in s 121(5) of the Bankruptcy Act in the common law contractual sense with the result that any 'past consideration' is to be disregarded. 109 The learned primary judge did not give consideration to the issues of construction considered above. It would appear that they were not argued before him. This may be because of the earlier consideration given by his Honour to the relevant statutory provision in Official Trustee in Bankruptcy v Higgins [2000] FCA 1850; 109 FCR 1 ('Higgins' case'). 110 In Higgins' case the Local Court of New South Wales had made, by consent, an order under s 79 of the Family Law Act. The husband's trustee in bankruptcy subsequently sought a declaration in the Federal Court that a transfer of property by the husband to the wife was void as against the trustee. The reasons for judgment of Tamberlin J reveal at [3] that the parties requested his Honour to proceed on the basis that the bankrupt had transferred his interest in the property to the wife in circumstances that were caught by ss 120(1) and 121(1) of the Bankruptcy Act. In the circumstances it is probably not surprising that his Honour concluded at [22] that: '… the position in the present case is that the Federal Court has both the power and jurisdiction to make an order under s 121 in a case such as this.'

Nonetheless, of his own motion, his Honour transferred the proceeding to the Family Court under s 35A of the Bankruptcy Act. Having regard to the above history of Higgins' case, it is similarly not surprising that when that proceeding came before the Family Court, Moore J proceeded to make orders under s 121 of the Bankruptcy Act. No application was made to her Honour under s 79A of the Family Law Act. Her Honour did, however, in the course of her careful judgment, at [38] observe:

'As I see it, if the right of the Trustee to recover property from voidable transactions, as provided in ss 120 and 121, were to depend on the vicissitudes of an application of the facts not just to those provisions themselves (together with other relevant provisions of the Bankruptcy Act) but also to the provisions of s 79A of the Family Law Act, one might reasonably expect to find an exemption provided in either statute. Neither says anything of the kind. The absence of any specific provision to that effect leads to the inference that s 79A was not intended to operate as an exception to the application of ss 120 or 121.' 111 It seems to me, with respect, that, even if the issues of construction discussed above are put to one side, it might equally be said that had the legislature intended that an order, which might be that of a superior court, necessarily calculated to achieve a just and equitable balancing of the interests of the parties to the marriage and the legitimate interests of third parties, should be rendered, either wholly or in part, void against a trustee in bankruptcy of one of the parties by the mere operation of s 121 of the Bankruptcy Act, one might reasonably expect to find an express statement of that intention. This is not just because of the respect that ought properly to be accorded to an order of a superior court. It ought not to be overlooked that the only power given to the Federal Court to set aside a notice given under s139ZQ of the Bankruptcy Act is a power dependent upon satisfaction that relevant provisions of that Act do not apply to the person to whom the notice was given. The Federal Court is not given a power to set aside or vary the effect of the notice to achieve a just and equitable outcome between the interests of the unsecured creditors of the bankrupt and the person to whom the notice was given, including any child of the marriage dependent on that person. If the legislature should decide that the rights of an unsecured creditor should necessarily prevail over the interests of not only the non-debtor party to the marriage but also any child of the marriage it may enact legislation that so provides. However it would, it seems to me, need to do so in unambiguous language (cf Johnson v Director-General of Social Welfare (Vic) (1976) 135 CLR 92). 112 This Court's attention was drawn during the hearing of this appeal to a number of decision of the Supreme Court of New South Wales concerning the interrelationship of s 37A of the Conveyancing Act 1919 (NSW) ('the Conveyancing Act') on the one hand and s 79 of the Family Law Act or s 14 of the Property (Relationships) Act 1984 (NSW) on the other hand, previously known as the De Facto Relationships Act 1984 (NSW). As Wilcox J has pointed out, the terms of s 37A of the Conveyancing Act are significantly different from the terms of s 121 of the Bankruptcy Act. As, in my view, this appeal can be determined simply by giving consideration to the proper construction of ss 79 and 79A of the Family Law Act and s 121 of the Bankruptcy Act, it is unnecessary for these decisions to be subjected to examination on this appeal. 113 Similarly, in my view, decisions concerning s 121 of the Bankruptcy Act as in force before the coming into force of the Bankruptcy Legislation Amendment Act 1996 (Cth) are of limited assistance on the question of construction here raised.

CONCLUSION 114 Although I have adopted a different approach to that adopted by Tamberlin J, in my view, the order his Honour made setting aside the notice issued by the Official Trustee was the appropriate order in the circumstances of this case. The first respondent did not, in my view, receive any money or property as a result of a 'transaction' that is void against the trustee of a bankrupt (see s 139ZQ of the Bankruptcy Act). Section 121 of the Bankruptcy Act, upon which the applicant relied, had no application to the first respondent on the bases of the alleged facts and circumstances set out in the notice given to her by the Official Receiver (s 139ZS of the Bankruptcy Act). The remedy, if any, available to the appellant in the circumstances is, I consider, to make an application to the Family Court under s 79A of the Family Court Act. 115 I would dismiss the appeal and allow the parties to file written submissions on the question of costs. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

On appeal from a Judge of the Federal Court of Australia

REASONS FOR JUDGMENT MERKEL J: 116 The background to this appeal and the relevant facts, statutory provisions and contentions are set out in the judgments of Wilcox J and of Branson J. The question arising on the appeal is whether a transfer of property between parties to a marriage pursuant to an order of the Family Court made under s 79 of the Family Law Act 1975 (Cth) ("the Family Law Act") becomes void in the event that: · the transferor later becomes a bankrupt; and · the transfer is an undervalued transaction under s 120 of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act") or a transfer to defeat creditors under s 121 of the Bankruptcy Act. 117 If that question is answered in the negative then the appellant ("the Official Receiver") is not entitled to issue a notice under s 139ZQ of the Bankruptcy Act requiring payment of an amount of money or the value of property received as a result of a transfer of property made pursuant to s 79 of the Family Law Act. The reason for the non-applicability of s 139ZQ is that the transfer will not satisfy the precondition for such a notice, being that the transfer is void against the trustee in bankruptcy under, inter alia, ss 120 or 121 of the Bankruptcy Act. 118 The first respondent ("the bankrupt's wife") married Arturo Mateo ("the bankrupt") in 1972. The second, third and fourth respondents are children of the marriage. The break-down of the marriage between the bankrupt and his wife resulted in their separation on 10 January 2000. On 18 April 2000 they signed a document entitled "Consent Orders". The orders were subsequently made by the Family Court on 22 June 2000. At the date on which the orders were made the bankrupt was insolvent but not bankrupt. Pursuant to the orders the bankrupt was required to transfer to his wife within 28 days his right, title and interest in the matrimonial home at 3 Coolabah Street, Marylands West, in the State of New South Wales. Under the orders: · the bankrupt's wife was required to pay to the bankrupt $3,000 upon the signing of the orders and $7,000 upon the signing of the transfer of the home; · provision was made for a further $10,000 to be paid to the bankrupt and for at least $80,000 to be paid to the three children of the marriage after the sale of the home; · the Family Court "noted" that pursuant to s 81 of the Family Court Act the parties intended that the orders "as far as practicable finally determine the financial relationship between them and avoid further proceedings between them" and stated that the orders did not include any orders for maintenance. 119 The consent orders dealt with certain other matters but they are not relevant to the issues arising on the appeal. 120 When the consent orders were filed with the Family Court they were accompanied by an application for consent orders in accordance with Form 12A: see O 14 r 2 of the Family Court Rules 1984 (Cth) ("the Family Court Rules"). Order 14 r 6 of the Family Court Rules provides for consent orders to be made in Chambers by a Registrar, Judge, Judicial Registrar or Magistrate. 121 The Form 12A application for consent orders filed by the bankrupt and his wife required each of them to state details of their property and liabilities and describe the effect of the orders they were seeking by setting out their "proposal for the distribution of property, resources and liabilities". The bankrupt's statements in the Form 12A application were to the effect that the total value of his property was $192,020 and the total value of his liabilities was $82,000 leaving a "Total net property" of $110,020. The bankrupt disclosed that the effect of the orders sought would be to decrease his net assets to $27,000. The value of the matrimonial home, which was subject to a mortgage of $111,000, was stated to be $350,000. The bankrupt and his wife included one-half of the value of the home in their respective statements of the property owned by them and one-half of the amount of the mortgage as part of their respective liabilities. 122 In accordance with O 14 r 3 of the Family Court Rules the bankrupt and his wife were each required to swear an affidavit in the form set out in Form 12A. The affidavit sworn by the bankrupt stated that the matters set out in the Form 12A application that were within his personal knowledge were true and all other matters were true to the best of his knowledge, information and belief. 123 On 10 August 2000 the transfer of the property by the bankrupt to his wife was registered. On 19 March 2001 the bankrupt's wife sold the matrimonial home for $398,000. On 10 April 2001, prior to the settlement of the sale, the bankruptcy of the bankrupt commenced pursuant to s 55 of the Bankruptcy Act. 124 Under ss 120 and 121 of the Bankruptcy Act a transfer of property is only void against the trustee in bankruptcy where there has been a: "transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee)" 125 A further precondition to the operation of s 120 is that the transferee "gave no consideration for the transfer or gave consideration of less value than the market value of the property" (s 120(1)(b)). A transfer of property that would otherwise fall within s 121(1) is not void against the trustee in bankruptcy if the consideration that the transferee gave for the transfer "was at least as valuable as the market value of the property" (s 121(4)(a)). 126 Section 79 of the Family Law Act empowers the Family Court to make "such order as it considers appropriate altering the interests" of the parties to a marriage in property owned by them. Sections 79(2) and (4) expressly require that an order not be made unless the Court is satisfied that it is just and equitable to make the order after taking into account the factors mentioned in s 79(4): see Mallet v Mallet (1984) 156 CLR 605 at 608, 625 and 647. The question of statutory construction arising on the appeal is whether an alteration of the interest in property owned by a person, who later becomes a bankrupt, by a consent order made under s 79 of the Family Law Act is a "transfer of property by a person … to another person" within the meaning of those words in ss 120 and 121 of the Bankruptcy Act. 127 At the outset it is appropriate to identify certain features of an order under s 79 of the Family Law Act. First, the order is a final order, subject to the limited jurisdiction to set aside or vary such an order by appeal or under s 79A of the Family Law Act: see Mullane v Mullane (1983) 158 CLR 436 ("Mullane") at 442-443. The order may also be set aside on the ground of jurisdictional error in an application for prerogative relief under s 75(v) of the Constitution. 128 Second, a court order settling property between husband and wife, including a requirement that there be a transfer of one party's interest to the other, has generally been regarded as vesting in the transferee an equitable estate or interest in the property pending the transfer of the legal estate or interest: see Harris v Walker (1968) 14 FLR 167 at 176. 129 In Mullane the Court stated at 445: "s.79 on its proper construction refers only to orders which work an alteration of the legal or equitable interests in the property of the parties or either of them. An interest in property is a right of a proprietary nature, not a mere personal right" 130 In Craven v Official Trustee in Bankruptcy (unreported, Supreme Court of New South Wales, Needham AJ, No 2712 of 1991, 26 July 1991) Needham AJ, in reliance on Mullane, concluded that an order altering property interests under s 79 "creates an equitable interest in the land which could be enforced just as a contract of sale could be enforced". 131 Third, the fact that a consent order might be made under s 79 does not have the consequence that the transfer of the equitable estate or interest is pursuant to the agreement between the parties giving rise to the consent, rather than pursuant to the Court order. As was observed by Lord Diplock in de Lasala v de Lasala [1980] AC 546 ("de Lasala") at 560: "Financial arrangements that are agreed upon between the parties for the purpose of receiving the approval and being made the subject of a consent order by the court, once they have been made the subject of the court order no longer depend upon the agreement of the parties as the source from which their legal effect is derived. Their legal effect is derived from the court order" 132 In Harris v Caladine (1991) 172 CLR 84 Brennan J at 104, citing de Lasala, observed that a consent order, though made in accordance with the party's contract, takes effect as an order of the court and is enforceable as such, rather than as a contract to be sued on in a separate action. Dawson J (at 124) also referred to de Lasala and stated that in the case of an application under s 79, even if there is a consent amounting to a contract, that is not enough of itself to entitle the parties to an order because the "requirements of the section must be satisfied". Dawson J stated that "it is the order itself which is of legal significance". 133 It follows from the foregoing that when the Family Court makes an order by consent under s 79(1) of the Family Law Act altering the interests in property of the parties to a marriage the alteration, and the consequential vesting of the equitable estate or interest in the property in the transferee, take effect by reason of the Court order and not by reason of the consent of the parties, even if that consent amounts to a contract between them. 134 The consent orders made by the Family Court on 22 June 2000 altered the interests in the matrimonial home of the bankrupt and his wife by transferring the equitable estate and interest of the bankrupt in the matrimonial home to his wife. The transfer of that estate and interest was brought about by the order of the Family Court, rather than by a transfer of the estate or interest by the bankrupt. For the purposes of ss 120 and 121 of the Bankruptcy Act the transfer of the equitable estate and interest in the matrimonial home was "by the consent orders made on 22 June 2000" and not "by the bankrupt". Accordingly, there has not been a "transfer of property by a person who later becomes a bankrupt". 135 It may have been arguable that the transfer of property pursuant to a court order is a transfer by a court and that the court is "a person". Section 22(1)(a) of the Acts Interpretation Act 1901 (Cth) provides that, unless the contrary intention appears, "person" includes a body politic or corporate as well as an individual. However, as was explained by Lindgren J (with whom Jenkinson and Kiefel JJ agreed) in Kizon v Palmer (1997) 142 ALR 488 at 505-506 authority favours the view that the word "person" does not encompass a reference to a "court". In any event, in the context of ss 120 and 121 of the Bankruptcy Act, it is clear that the transferor must be an individual who may become a bankrupt. It must follow that a transfer of property by a court is not a transfer by a person. 136 Accordingly, an alteration of a property interest by reason of an order of the Family Court, whether made by consent or otherwise under s 79 of the Family Law Act, which transfers an equitable estate or interest in the property to a party to the marriage is not "a transfer of property by a person who later becomes a bankrupt" to another person for the purposes of ss 120 and 121 of the Bankruptcy Act. 137 Of course, the subsequent execution of a transfer in accordance with the court order by the bankrupt to his wife of the bare legal estate held by him in the matrimonial home is a transfer, made pursuant to the consent orders, by the bankrupt of the legal estate and interest in the matrimonial home to another person for the purposes of ss 120 and 121. However, that transfer has little, if any, relevance for a number of reasons. First, as the consent orders resulted in the legal estate and interest being held by the bankrupt and the equitable estate and interest being held by his wife, that was all that was necessary "to establish the relation of trustee and cestui que trust" between the bankrupt and his wife (see Hardoon v Belilios [1901] AC 118 at 123). Because trust property does not form part of the property of the bankrupt which is divisible among creditors (see s 116(2)(a) of the Bankruptcy Act), the legal estate and interest, as trust property, fall outside the scheme of the Bankruptcy Act and there is no occasion for the Official Receiver to make the trust property the subject of a notice under s 139ZQ. Second, as the value of the legal estate and interest is nil there would be no point in the Official Receiver making that estate or interest the subject of a notice under s 139ZQ. Third, as the value of the legal estate and interest is nil and some consideration was in fact paid by the bankrupt's wife the requirement of no, or inadequate, consideration being paid has the result that the consideration requirements in s 120(1)(b) were not satisfied. Also, the equal value of the consideration given and received (ie, nil) results in the precondition for exclusion from s 121(4)(a) being satisfied. 138 For the above reasons the separate transfers of the legal and equitable estate and interest in the matrimonial home to the bankrupt's wife were not void under ss 120 or 121 of the Bankruptcy Act and, as a result, the bankrupt's wife was entitled to have an order made by the primary judge under s 130ZS of the Bankruptcy Act setting aside the notice given by the Official Receiver pursuant to s 130ZQ of the Bankruptcy Act. 139 The contention of the Official Receiver that ss 120 and 121 operate to render void a transfer of property made by an order of the Family Court under s 79 of the Family Law Act might raise a question of the usurpation of judicial power. Section 21(2) of the Family Law Act declares the Family Court to be a superior court of record. An order of the Family Court made under s 79 whether by consent or not or by a Registrar or a Judge, is a final judicial order of the Family Court. In general, judicial orders of superior courts of record are valid until they are set aside on appeal, even if they are made in excess of jurisdiction: see Cameron v Cole (1944) 68 CLR 571 at 590 and 606; Wilde v Australian Trade Equipment Co Proprietary Limited (1981) 145 CLR 590 at 602; DMW v CGW (1982) 151 CLR 491 at 504-505; Ousley v The Queen (1997) 192 CLR 69 at 107 and 129-130; and Re Macks; Ex parte Saint (2000) 204 CLR 158 at 235-236 and 274-275. Thus the consent orders, not having been set aside or varied on appeal under s 79A or under s 75(v) of the Constitution, stand as valid and operative. Yet the operation of ss 120 and 121 contended for by the Official Receiver would have the effect of rendering nugatory or nullifying the transfer of an interest in property effected by a valid and final order of a superior court of record. 140 If the legislature enacted legislation that directly interfered with or nullified an order of a superior court of record that could constitute an usurpation of judicial power: see for example Liyanage v The Queen [1967] 1 AC 259 at 289-290; Plaut v Spendthrift Farm Inc (1995) 131 L Ed 2d 328 at 355 per Scalia J (joined by Rehnquist CJ, O'Connor, Kennedy, Souter and Thomas JJ); The Queen v Humby; Ex parte Rooney (1973) 129 CLR 231 at 249; Re Macks; Ex parte Saint (2000) 204 CLR 158 at 179 and 266 and Nicholas v The Queen (1998) 193 CLR 173 at 255-256. I doubt that that has occurred in the present case. Sections 120 and 121 are laws of general application and, plainly, were not intended to operate in a manner that interfered with the exercise of judicial power. Further, the operation of the sections was preconditioned on a subsequent event, namely the transferor's bankruptcy. It is unlikely that an interference of that kind would constitute usurpation of judicial power. However, as I have concluded that ss 120 and 121 do not have the operation contended for by the Official Receiver it is unnecessary to further pursue this issue. 141 In Official Trustee in Bankruptcy v Higgins (unreported, Family Court of Australia, Moore J, SY2465 of 2001, 2 September 2002) ("Higgins") Moore J concluded that ss 120 and 121 of the Bankruptcy Act can have the effect of setting aside orders made by the Family Court under s 79 of the Family Law Act. Her Honour expressed her conclusions at [55]-[56]: "The transfer of property pursuant to s 79 orders is not exempt from the provisions of the Bankruptcy Act. If the circumstances mean that a transfer under such an order is later caught by the voidable transactions provisions of the Bankruptcy Act, then it follows that the transfer is void against the Trustee in bankruptcy. A declaration to that effect is available from the Court exercising bankruptcy jurisdiction and that Court has the power given in s 30 to make such consequential orders as it considers necessary to give effect to the Act, including an order for a further transfer. This does not give rise of itself to any inconsistency of orders. The order made under s 79 of the Family Law Act is subject to the ordinary operation of bankruptcy law and the property dealt with in the order must be that of the parties and not that vested by law in another. I can find no obligation on the Trustee to seek to set the s 79 orders aside by bringing an application under s 79A of the Family Law Act - either to eliminate any perceived inconsistency or to relieve the non-bankrupt spouse from obligations undertaken there. If relief is needed, the non-bankrupt spouse has the remedy available. Not only is there nothing specifically requiring the earlier order to be set aside in either Act, but there is nothing in a reading of either from which it should be inferred that would be a necessary step in the recovery of property for distribution to the bankrupt's creditors. In this case, the concession was made that the transfer was caught by ss 120 and 121. Finding as I do no obligation on the Trustee to have the consent order set aside before the Trustee is entitled to the relief provided there, the declaration and consequential order to give effect to it should be made." 142 The concession made before her Honour that the transfer of property under s 79 "was caught by ss 120 and 121" resulted in her Honour not having to confront the critical question considered in these reasons, being whether such a transfer was "caught" by those statutory provisions. If I had concluded that a transfer of property under an order made pursuant to s 79 of the Family Law Act fell within the express preconditions for the operation of ss 120 and 121 then there may have been much to be said in favour of her Honour's reasoning. However, a quite different result must follow once the conclusion is reached that a transfer under s 79 does not fall within the terms of ss 120 and 121 of the Bankruptcy Act. 143 The conclusion that s 79 orders do not fall within the terms of ss 120 and 121 of the Bankruptcy Act makes it even more imperative that the judges and judicial officers exercising the power to make consent orders under s 79 are aware of the potential for such orders to operate to the detriment of arms length creditors. The Family Court decisions discussed by Moore J in Higgins at [19]-[23] (which include Biltoft v Biltoft (1995) 19 Fam LR 82), demonstrate that, in principle, the Family Court does ascertain the property available for distribution between the parties on the basis of deducting from the value of each party's assets the value of their liabilities. However, as the facts in Higgins and the present case demonstrate, in the usual course the consent order procedure followed for s 79 orders may not involve any real factual investigation as to the interests that might be detrimentally affected by the orders. While the giving of notice to creditors whose interests may be affected by such orders is an appropriate step (see Higgins at [23] and the cases there cited) the fact that such notice might be given does not absolve the Family Court from its duty to ensure that its orders do not operate unjustly or inequitably. 144 As was made clear in Ascot Investments Proprietary Limited v Harper (1981) 148 CLR 337 at 342 and 354-355 ("Ascot Investments") the Family Court, in exercising its jurisdiction and power in relation to the property interests of the parties to a marriage, is not to ignore the interests of third parties. I agree with the observation of Branson J at [93] that Ascot Investments is authority for the proposition that the Family Court has the power to make an order which affects the obligations of the parties to a marriage, the one to the other and to the children of the marriage, notwithstanding that such an order may affect the position of the third party (eg by reducing the property available to unsecured creditors should a sequestration order be later made against the estate of one of the parties to the marriage). However, it does not follow that, ordinarily, it would be a proper exercise of the power for the Family Court to make orders under s 79 altering property interests if, on the material before the court, the orders would result in the transferor having insufficient assets to discharge his or her liabilities to arms length creditors. There must be a real issue as to whether such orders are just and equitable if their inevitable consequence would be to defeat the claims of those creditors. That issue, however, is a matter for the Family Court. 145 In that regard, in Ascot Investments when Gibbs J stated at 355 that in a s 79 application "the Family Court must take the property of a party to the marriage as it finds it", his Honour appears to have been referring to the qualitative, rather than quantative, aspects of the property in question. However, it is consistent with the general principles enunciated by his Honour, and also with the "just and equitable" requirement in s 79, for the Family Court when exercising its power to alter property interests under s 79 to have regard to the net value of the property available to be shared. 146 In the present case, the Family Court was not accurately informed by the bankrupt of the extent of his liabilities as the Form 12A application did not disclose that the bankrupt was insolvent or that the alteration in property interests would result in the bankrupt being unable to pay his creditors. Thus, the Official Receiver would appear to be in a strong position to apply to the Family Court under s 79A(1)(a) of the Family Law Act for a variation of the orders. While the issue of whether the Official Receiver is a "person affected" by the s 79 orders does not appear to have been finally determined in the Family Court (see Higgins at [32]-[37]) it would be an anomalous outcome if the Official Receiver was not a person affected, given the conclusion reached on this appeal that if the Official Receiver wishes to set aside or vary s 79 orders that may have been consented to by the bankrupt to defeat his creditors, she needs to do so by an application under s 79A. 147 For the above reasons I have concluded that the Official Receiver was in error in giving written notice under s 139ZQ(1) because the transfer of the bankrupt's interest in the matrimonial home was not void against the trustee in bankruptcy pursuant to ss 120 and 121 of the Bankruptcy Act. Accordingly, but for reasons quite different to those given by the primary judge, his Honour was correct in ordering that the notice given by the Official Receiver under s 139ZQ be set aside under s 139ZS. As a consequence the appeal is to be dismissed. 148 I agree that the parties should be afforded an opportunity to put written submissions to the Court on the questions of costs. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Counsel for the Appellant: P Taylor SC with PB Walsh

Counsel for the Respondents: PL Brereton SC with DP Ash

Solicitor for the Respondents: Belen Oag, Solicitors