Mr Richard Jones purchased his first Range Rover in 1976 and since then he has owned a series of them. He was always pleased with the performance of the vehicles until 2004 when he purchased a Range Rover costing $118,150 from Purnell Motors. Shortly after taking delivery of the vehicle, it developed numerous problems and was repaired by the dealer on a number of occasions but not to the satisfaction of Mr Jones.
In 2009, Mr Jones commenced Court proceedings against Purnell Motors and Jaguar Land Rover Australia Pty Ltd (Jaguar Land Rover), the local distributor of Range Rovers, making various claims in relation to his defective Range Rover.
Mr Jones settled his claim against Jaguar Land Rover. In 2010, the Court held that Mr Jones had suffered a loss of $100 which he had already received in a settlement from Jaguar Land Rover and for that reason, ordered a verdict in favour of Purnell Motors and ordered Mr Jones to pay 80% of Purnell Motors’ costs. At that time, Mr Jones owned properties in Leichardt, Armidale and Dorrigo which were subject to mortgages. On 12 May 2010, Purnell Motors served Mr Jones with a Bill of Costs for $510,817.50 of which, 80% was $408,654.
On 13 July 2010, Mr Jones signed a transfer of his Armidale property in favour of Crest Australia Pty Ltd (Crest) – the Trustee of his superannuation fund for a purported consideration of $120,000. On 1 September 2010, Mr Jones signed a Transfer of his Dorrigo property to a friend for a purported consideration of $280,000.
On 20 September 2011, Purnell Motors entered Judgment for $282,686.93 being the assessed costs and commenced bankruptcy action against Mr Jones. On 5 October 2012, Mr Jones was made bankrupt by Court order and a registered trustee was appointed.
In June 2013, the trustee served Section 139ZQ Notices on to each of the transferees of the two properties asserting that the transfers were void against the trustee. The transferee of the Dorrigo property complied with Notice and transferred the property to the trustee but Crest did not do so.
In September 2014, Mr Jones now discharged from bankruptcy, commenced proceedings in the Federal Circuit Court seeking various orders against the trustee and others including relief concerning the Section 139ZQ notice issued to his friend in respect of the Dorrigo property.
The trustee responded with a cross claim against Mr Jones and Crest seeking declarations and orders that the transfers of the Armidale and Dorrigo properties were void against the trustee, plus an order that the trustee be granted possession of the Armidale property.
On 16 June 2017, the Federal Circuit found in favour of the trustee and declared that both of the property transfers were void against the trustee because it was clear that Mr Jones transferred the 2 properties shortly after he was served with the bill of costs for $408,654 and it was reasonable to expect that Purnell Motors would take bankruptcy action against him to recover its costs. The trustee was also granted a Writ of Possession for the Armidale property as a prelude to its sale.
So in hindsight, it has been a rather costly exercise for Mr Jones and the amount which it has cost him would have probably been enough to buy 3 Range Rovers from another dealer or perhaps a similar vehicle made by another manufacturer.