Under s 37A(3) of the Conveyancing Act 1919 (NSW), the onus of proving good faith and absence of notice lies on the person seeking the protection of the proviso, not on the person seeking to set aside the alienation. This differs from the position under s 121(1) of the Bankruptcy Act, where the onus of proving lack of good faith lies on the party seeking to avoid the transaction. An alienation that amounts merely to a preference of one creditor over another does not fall within s 37A. Where spouses have informal financial arrangements, the court must examine the true effect of the legal relationships between them, but the existence of such arrangements does not preclude a genuine debt from arising.
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