DECLARED VOID

Dominion, Volume 23, Issue 5, 1 October 1929, Page 9

DECLARED VOID

TRANSFER OF PROPERTY BANKRUPT’S WIFE SUED Judgment has been delivered by His Honour Mr. Justice Smith in the case of the Official Assignee in Bankruptcy against Eva Maud Foote, married woman, of Petone, an action to set aside a transfer of land from a bankrupt to his wife. The case concerned an allegation that on May 27, 1927, by memorandum of transfer, Foote, who was adjudicated a bankrupt on July 16, 1928, and was still an undischarged bankrupt, executed a transfer to the defendant of a property at Beach Street, Petone, at a time when he was not able to pay his debts without the aid of the property. The land was subject to mortgages totalling £575. It was further alleged that the transfer was made with the intention on the part of defendant of defrauding the creditors, and the transfer, it was claimed, was void as against the plaintiff acting for the creditors. The plaintiff claimed a declaration that the transfer was void as against him, and asked for a declaration to that effect, and for an order that the defendant should transfer the property to him for the benefit of the creditors. Unable to Pay.

After reviewing the evidence, His Honour stated that at the time of the transfer defendant’s husband was indebted to the extent of £164 3s. 3d. Foote was clearly unable to pay all his debts without the aid of the house property. Notwithstanding that position, defendant’s husband, having transferred the property to his wife, proceeded to tender for jobs on a much larger scale than previously. He evidently overworked himself and after six months broke down in health. The only income then available was the sum of £2 10s. per week paid by defendant’s father and mother for board and lodging. That payment had commenced in March or April, 1927, when the defendant’s mother broke down in health; and about two months before the transfer of the property to the defendant “The conclusion to which I come on the evidence so far is that the property was placed in the husband’s name because it was regarded by both the husband and by the wife as his, and that he was paying for it, although the wife managed the disbursement of his wages, and herself contributed something when her husband was out of work or ill. Both the husband and the wife really regarded the property as the husband’s because he was paying for it, but they thought it was a prudent thing to transfer it to the wife when her husband started to engage in the hazardous business of a building contractor on his own account It is idle to say that the costs of transfer prevented transfer at an earlier date. The expenses would have to be found whenever the property was transferred, and the wife, it is said, found the necessary money in four or five weeks after the arrangement to transfer was made. Aet Fulfilled.

“It is clear that the transfer of the property from the husband to the wife on May 27, 1927, is a settlement of property within the definition of 'settlement 1 in the Bankruptcy Aet, 1908, and. that it was not made before and in consideration of marriage, or in favour of .a purchaser or incumbrancer in good faith and for valuable consideration. Nor is it a settlement made on or for the wife, of children of the settler of property, which accrued to the settler after marriage in right of his wife. It is clear also that the settler was at the time of the settlement unable to pay his debts without the aid of the property comprised in the settlement. He has become bankrupt within three years of the settlement AH the conditions of Section 75 (b) of The Bankruptcy Act, 1908, have therefore been fulfilled, and the settlement is void as against the Official Assignee.” His Honour accordingly made an order declaring the transfer void as against the Official Assignee, and ordered also that the defendant transfer to the plaintiff the land described in the memorandum of transfer for the benefit of the creditors, subject to the registered incumbrances. “The equity in the property,” concluded His Honour, “is approximately £260. The plaintiff will have costs on the middle scale as on a sum of £260, with witnesses* expenses and disbursements- to be fixed by the registrar.” . At the hearing of the case, plaintiff was represented by Mr. W. P. Shorland, and defendant by Mr. C. A. L. TreadweH.