Zreika v Royal

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 23 May 2019
• Neutral Citation: [2019] FCAFC 82
• Date: 23 May 2019

FEDERAL COURT OF AUSTRALIA

Zreika v Royal [2019] FCAFC 82

Appeal from:	Royal v El Ali [2016] FCA 782 Royal v El Ali (No 2) [2016] FCA 1156 Royal v El Ali (No 3) [2016] FCA 1573 Royal v El Ali (No 4) [2017] FCA 299
File numbers:	NSD 1793 of 2016 NSD 1794 of 2016 NSD 1798 of 2016 NSD 1799 of 2016 NSD 1801 of 2016 NSD 29 of 2017
Judges:	BESANKO, FARRELL AND O'CALLAGHAN JJ
Date of judgment:	23 May 2019
Catchwords:	BANKRUPTCY AND INSOLVENCY — six appeals from orders of a judge of the Federal Court of Australia — where the first, second and third respondents sought relief before the primary judge under s 37A of the Conveyancing Act 1919 (NSW) and s 121 of the Bankruptcy Act 1966 (Cth) in relation to transfers of shares in various companies and dispositions of various properties — where the respondents concede that the declarations made by the primary judge in relation to the dispositions of various properties could only be made under s 37A of the Conveyancing Act ; CONVEYANCING — whether the primary judge erred in finding that dispositions of various properties were made for nominal consideration with the intent to defraud the creditors of the appellant in NSD 1798 of 2016 for the purposes of s 37A of the Conveyancing Act — where the primary judge made adverse credit findings against the appellants — where the appellants did not directly challenge the primary judge’s adverse credit findings on appeal — whether the primary judge erred in distinguishing Cannane v J Cannane Pty Ltd (in liq) (1998) CLR 357 ; PRACTICE AND PROCEDURE — whether the appellant in NSD 1801 of 2016 is entitled to raise a new defence relying on Brady v Stapleton (1953) 88 CLR 322 on appeal — whether the appellant is raising a new legal issue on appeal or appealing against an order on the basis that the primary judge’s decision was wrong for want of jurisdiction CONVEYANCING — whether Brady v Stapleton is authority for the proposition that a finding pursuant to s 37A(3) of the Conveyancing Act in favour of a bona fide purchaser for value extends not only for the benefit of that purchaser but also for the benefit of the assignee of the fraudulent debtor — whether Brady v Stapleton is authority for the proposition that, once a property has been on-sold, no personal liability can lie against the assignee by the assignor because the assignment was valid at the time it occurred, even where the assignee had full knowledge of the fraudulent intent ; CORPORATIONS — where the primary judge refused to approve a deed pursuant to s 477(2A) of the Corporations Act 2001 (Cth) — whether the order by the primary judge refusing approval of the deed was an interlocutory order — whether the primary judge’s refusal to approve the deed is attended with sufficient doubt to warrant it being reconsidered ; COSTS — whether the primary judge erred in exercising a discretion to make a lump sum order for costs on a joint and several basis — whether the primary judge erred in rejecting the submission that the respondents were not legally obliged to pay any legal costs to their solicitors — consideration of the indemnity principle — where the primary judge found that the respondents’ obligation to pay costs was a contingent liability
Legislation:	Bankruptcy Act 1966 (Cth) ss 30, 58, 109, 116, 121 Corporations Act 2001 (Cth) s 477 Federal Court of Australia Act 1976 (Cth) ss 5, 23, 37M Conveyancing Act 1919 (NSW) s 37A Duties Act 1977 (NSW) s 54 Mercantile Acts 1867 (Qld) ss 46, 47, 48 Federal Court Rules 2011 (Cth) r 39.05
Cases cited:	Agusta v Provident Capital [2012] NSWCA 26; (2012) 16 BPR 30,397 Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93 Armour v Mason [2002] NSWSC 464 B v U [2012] NSWSC 1416 Beneficial Insurance Co Ltd v Hamilton (1985) 73 FLR 347 Brady v Stapleton [1952] HCA 62; (1953) 88 CLR 322 Branir Pty Ltd v Owston Nominees Pty Ltd (No 2) [2001] FCA 1833; (2001) 117 FCR 424 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Cannane v J Cannane Pty Ltd (in liquidation) [1998] HCA 26; (1998) 192 CLR 557 Capital Finance Australia Ltd v Tolcher [2007] FCAFC 185; (2007) 164 FCR 83 Capital One Securities Pty Ltd v Soda Kids Holdings Pty Ltd [2014] VSC 168 Carr v Finance Corporation of Australia [1981] HCA 20; (1981) 147 CLR 246 Chilton v London Corporation (1878) 7 Ch D 562 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 Coghlan v Alexander (1905) 5 SR NSW 441 Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124 D’Agostino v Zandata Pty Ltd [2018] VSC 115 Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 Deputy Commissioner of Taxation v Leaver [2016] FCA 1028 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Freeman v Pope (1870) 5 Ch App 538 Glegg v Bromley [1912] 3 KB 474 Griffiths v Civil Aviation Authority [1996] FCA 397 Hall v Poolman [2007] NSWSC 1330; (2007) 215 FLR 243 House v The King (1936) 55 CLR 499 Huynh v Helleh Holdings Pty Ltd [2001] NSWSC 1162; (2001) 10 BPR 19,333 Ingram v Y Twelve Pty Ltd 12 [2013] NSWSC 1777 In the Matter of 246 Arabella Investments Pty Ltd (In Liq) [2012] NSWSC 1212 In the matter of One.Tel Limited [2014] NSWSC 457; (2014) 32 ACLC 14-017 John v Neiman Holdings Pty Ltd (1986) 84 FLR 84 Mainieri v Cirillo [2014] VSCA 227; (2014) VR 127 Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546 Maria Bechara v Theodoros Haratsaris [2013] NSWSC 577 Michael v Thompson (1894) 20 VLR 548 Minister for Immigration, Local Government and Ethnic Affairs v Hamsher [1992] FCA 233; (1992) 35 FCR 359 Nguyen v Corbett [2017] NSWSC 1689 Obnova Concrete Pty Ltd (in liq) v Windlock Pty Ltd [2015] NSWSC 181 Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364 Paciocco v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146; (2017) 253 FCR 403 Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471 Pintarich v Deputy Commissioner of Taxation [2018] FCAFC 79 PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 Re Fasey; Ex parte Trustees (1923) 2 Ch 1 Re HIH Insurance Ltd [2004] NSWSC 5 Re Mineral Securities (Australia) Ltd [1973] 2 NSWLR 207 Re Spedley Securities Ltd (1992) 9 ACSR 83 Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2010] FCAFC 16; (2010) 265 ALR 112 Robinson Helicopter v McDermott [2016] HCA 22; (2016) 331 ALR 550 Royal v El Ali, in the matter of the bankrupt estate of El Ali [2013] FCA 923 Shannon v Commonwealth Bank of Australia [2013] NSWSC 596 Starkey on behalf of the Kokatha...