Cannane & Anor v Official Trustee in Bankruptcy
(1996) 65 FCR 453Andrew Vincent Cannane, First Appellant
Wisbeck Pty Ltd, Second Appellant
Official Trustee in Bankruptcy as Trustee of the Bankrupt Estate of John Vincent Cannane, Respondent
Denise Mary Cannane, First Appellant
J Cannane Pty Ltd (in liq), First Respondent
John Vouris (as Liquidator of J Cannane Pty Ltd (in liq)), Second Respondents
Subject References:
Bankruptcy
Application to set aside antecedent transactions
disposition of property with intent to defraud creditors under the Bankruptcy Act 1966, s121(1)
transfer of shares with no commercial value at time of disposition
whether commercial value a prerequisite to establishing an intention to defraud
payment of full consideration not determinative
existence of intention to defraud to be determined having regard to all the circumstances
Whether transferees purchasers in good faith
transferee with full notice of transferor's intention to place shares beyond reach of creditors
transferee without notice of purpose of transaction
transferee cannot deliberately eschew being put on notice of relevant facts and circumstances
settlement under the Bankruptcy Act 1966, s120
transfers of nominal value
retention of property must be contemplated
Valuation
shares in private company
price which a willing but not anxious vendor could reasonably expect to pay, and a willing but not anxious purchaser could reasonably expect to pay in friendly negotiation
events subsequent to date of valuation not to be taken directly into account
value to be determined without reference to warranties which may inhere to them
shares with no commercial value
prospect of company being used as investment vehicle for backdoor listing
Legislative References:
Bankruptcy Act 1966, ss120, 121 - ss 120; ss 121
Case References:
P T Garuda Indonesia Ltd v Grellman - (1992) 35 FCR 515
Freeman v Pope - (1870) LR 5 Ch App 538
Re Walters; Ex parte The Official Assignee - (1898) 19 LR (NSW) B
&
P 1
In re Tetley; ex parte Jeffrey - (1896) 66 LJQB 111
Lloyd's Bank Ltd v Marcan - [1973] 1 WLR 33
Trautwein v Richardson - (1946) 52 ARG LR 129
Re Barnes; Ex parte Stapleton - [1962] Qd R 231
Mogridge v Clapp - [1892] 3 Ch 38
The Official Trustee v Marchiori - (1983) 69 FLR 290
Official Trustee in Bankruptcy v Mitchell - (1992) 38 FCR 364
Caddy v McInnes - (1995) 131 ALR 277
Abrahams v The Federal Commissioner of Taxation - (1944) 70 CLR 23
Commissioner of Succession Duties (SA) v Executor Trustee
&
Agency Co (SA) Ltd - (1947) 74 CLR 358
St Helens Farm (ACT) Pty Ltd v Federal Commissioner of Taxation - (1979) 79 ATC 4161
Gorton v Federal Commissioner of Taxation - (1965) 113 CLR 604
Hardie v Hansen - (1960) 105 CLR 451
Judgment date: 22 March 1996
Sydney
THE COURT ORDERS:
Appeals dismissed, with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.