Di Cioccio v Official Trustee in Bankruptcy

INTRODUCTION 1 The appellant (Mr Di Cioccio), during his bankruptcy, used income below the "actual income threshold amount" (that would have required him to pay part of any excess to the respondent (Official Trustee) under Div 4B of Pt VI of the Bankruptcy Act 1966 (Cth) (Act)), to acquire shares in several companies (Shares). The Official Trustee decided that the Shares were "after-acquired property" which vested in the Official Trustee under s 58(1) of the Act. 2 Mr Di Cioccio applied to the Federal Court for orders returning his savings to him: s 178 of the Act. Mr Di Cioccio contended that the Shares were excluded from the operation of s 58(1) by reason of Div 4B of Pt VI of the Act. The primary judge dismissed the application. Mr Di Cioccio then appealed to the Full Court. 3 We would dismiss the appeal. These reasons will address the facts and the statutory scheme and then, against that background, consider why the Shares were "after-acquired property" which vested in the Official Trustee under s 58(1) of the Act.

FACTS 4 The facts are not in dispute. The parties agreed that the facts had been stated fully by the primary judge (Di Cioccio v Official Trustee in Bankruptcy [2014] FCA 782) as follows: 3 Mr Di Cioccio acquired shares in several companies between 14 June 2013 and 27 September 2013 during the period of his bankruptcy. … Mr Di Cioccio received income during the term of his bankruptcy which was below the threshold that would have required him to pay any excess to the Official Trustee. Mr Di Cioccio, however, was able to save the income he received, and he applied the money saved to the purchase of shares. Mr Di Cioccio was made bankrupt on 20 January 2012 and was able to save the money partly because he was serving a term of imprisonment between 20 December 2011 and 13 February 2013. He was paid $2,500 by cheque upon his release on 13 February 2013 for the work he had performed whilst in prison. He lived with his parents upon his release from prison from 13 February 2013 to 17 October 2013, during which time he was on a Newstart allowance and his parents paid for his food, clothing and other living expenses and was not required to pay rent. In all Mr Di Cioccio was able to save $8,849.63 which he applied in part to purchase the shares. 4 On 17 October 2013 Mr Di Cioccio informed the respondent that he intended to purchase a motorcar. Mr Di Cioccio also informed the Official Trustee, when asked, that the money to purchase the car was to come from the sale of shares he had purchased from the income he had saved. The Official Trustee then informed Mr Di Cioccio that the shares purchased by him were an asset which had vested in the Official Trustee pursuant to s 58(1). On 22 October 2013 Mr Di Cioccio sought a review of that decision by the estate and administration team of the Australian Financial Security Authority who affirmed it in October. Mr Di Cioccio has sought a review by this Court of that decision under s 178 of the [Act]. On 30 October 2013 the Official Trustee sold the shares and realised $9,240.19. 5 Mr Di Cioccio was discharged from bankruptcy on 21 January 2015.

LEGISLATION 6 Two parts of the Act are central to the disputed issue - Pts IV and VI.

Part IV - Proceedings in connexion with bankruptcy 7 Part IV entitled "Proceedings in connexion with bankruptcy" includes provisions which address, amongst other things, what constitutes an act of bankruptcy (Div 1), creditors' petitions (Div 2), debtors' petitions (Div 3), the effect of bankruptcy on property and proceedings (Div 4) and meetings of creditors (Div 5). 8 We are concerned with Div 4 of Pt IV. It addresses the effect of bankruptcy on a bankrupt's property and proceedings. Section 58 of the Act, within Div 4, contains the "general rule" that the property of a bankrupt vests in the Official Trustee or a registered trustee. It relevantly provides: (1) Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee. … (Emphasis added.) 9 Three definitions should be noted. "Property" is defined in s 5(1) of the Act, unless the contrary intention appears, to mean: real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property. 10 "[T]he property of the bankrupt", in relation to a bankrupt, is defined in s 5(1) of the Act, unless the contrary intention appears, to mean: (a) except in subsections 58(3) and (4): (i) the property divisible among the bankrupt's creditors; and (ii) any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt; and (b) in subsections 58(3) and (4): (i) the property, rights and powers referred to in paragraph (a) of this definition; and (ii) any other property of the bankrupt. Sections 58(3) and (4) are concerned with enforcement of remedies by creditors (subs (3)) and the prohibition against levying distress for rent against the property of a bankrupt (subs (4)). These provisions may be put to one side. 11 "After-acquired property", in relation to a bankrupt, is defined in s 58(6), for the purposes of s 58 only, to mean: property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt. (Emphasis added.) That last phrase (in italics) is a concept which permeates the Act.

Part VI - Administration of Property 12 Part VI of the Act concerns administration of a bankrupt's property. Three divisions are relevant - Divs 3, 4 and 4B.

Division 3 - Property available for payment of debts 13 Division 3 of Pt VI contains a series of provisions which identify the property available for payment of a bankrupt's debts. Section 116(1) of the Act relevantly provides: Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; … … is property divisible amongst the creditors of the bankrupt. (Emphasis added.) 14 Section 116(2) provides that s 116(1) does not extend to certain identified property, including: (a) property held by the bankrupt in trust for another person; (b) the bankrupt's household property that is: (i) of a kind prescribed by the regulations; or (ii) identified by a resolution passed by the creditors before the trustee realises the property; (ba) personal property of the bankrupt that: (i) has sentimental value for the bankrupt; and (ii) is of a kind prescribed by the regulations; and (iii) is identified by a special resolution passed by the creditors before the trustee realises the property; (c) the bankrupt's property that is for use by the bankrupt in earning income by personal exertion and: (i) does not have a total value greater than the limit prescribed by the regulations; or (ii) is identified by a resolution passed by the creditors; or (iii) is identified by an order made by the Court on an application by the bankrupt; (ca) property used by the bankrupt primarily as a means of transport, being property whose aggregate value does not exceed the amount prescribed by the regulations or, if before the trustee realises the last-mentioned property the creditors determine by resolution a greater amount in relation to that property, that greater amount; (d) subject to sections 128B, 128C and 139ZU: (i) policies of life assurance or endowment assurance in respect of the life of the bankrupt or the spouse or de facto partner of the bankrupt; (ii) the proceeds of such policies received on or after the date of the bankruptcy; (iii) the interest of the bankrupt in: (A) a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or (B) an approved deposit fund (within the meaning of that Act); or (C) an exempt public sector superannuation scheme (within the meaning of that Act); … (g) any right of the bankrupt to recover damages or compensation: … … (n) property to which, by virtue of subsection (3), this paragraph applies; … (Emphasis added.) 15 The kinds of "household property" (in s 116(2)(b) of the Act) to which s 116(1) does not extend, are prescribed in reg 6.03 of the Bankruptcy Regulations 1996 (Cth) (Regulations): (1) For the purposes of subparagraph 116(2)(b)(i) of the Act, household property of the bankrupt specified in this regulation is household property to which subsection 116(1) of the Act (which deals with property divisible among the creditors) does not extend. (2) Subsection 116(1) of the Act does not extend to household property (including recreational and sports equipment) that is reasonably necessary for the domestic use of the bankrupt's household, having regard to current social standards. (3) In particular (but without limiting by implication the generality of subregulation (2)), subsection 116(1) of the Act does not extend to property of the following kinds: (a) in the case of kitchen equipment, cutlery, crockery, foodstuffs, heating equipment, cooling equipment, telephone equipment, fire detectors and extinguishers, anti-burglar devices, bedding, linen, towels and other household effects - that property to the extent that it is reasonably appropriate for the household, having regard to the criteria mentioned in subregulation (4); (b) sufficient household furniture; (c) sufficient beds for the members of the household; and (d) educational, sporting or recreational items (including books) that are wholly or mainly for the use of children or students in the household; (e) 1 television set; (f) 1 set of stereo equipment; (g) 1 radio; (h) either: (i) 1 washing machine and 1 clothes drier; or (ii) 1 combined washing machine and clothes drier; (i) either: (i) 1 refrigerator and 1 freezer; or (ii) 1 combination refrigerator/freezer; (j) 1 generator, if relied on to supply electrical power to the household; (k) 1 telephone appliance; (l) 1 video recorder. (4) For the purposes of deciding whether property, other than property of a kind mentioned in paragraphs (3)(b) to (l) (both inclusive), is property to which subregulation (2) applies, regard must be had to the following criteria: (a) the number and ages of members of the bankrupt's household; (b) any special health or medical needs of any of those members; (c) any special climatic or other factors (including geographical isolation) of the place where the household residence is located; (d) whether the property is reasonably necessary for the functioning or servicing of the household as a viable and properly run household; (e) whether the costs of seizure, storage and sale of the property would be likely to exceed the sale price of the property; (f) if paragraph (e) does not apply - whether for any other reason (for example, costs of transport) the sale of the property would be likely to be uneconomical. (5) The preceding provisions of this regulation do not prevent subsection 116(1) of the Act from extending to antique items. (6) For the purposes of subregulation (5), an item is taken to be antique if, and only if, a substantial part of its market value is attributable to its age or historical significance. (Emphasis added.) The creditors may also pass a resolution identifying household property to which s 116(1) does not extend: see s 116(2)(b)(ii). 16 Before leaving Div 3 of Pt VI of the Act, reference should also be made to s 116(3) of the Act. It provides that "[w]here, at any time, the whole, or substantially the whole, of the money paid for the purchase, or used in the acquisition, of particular property is protected money, paragraph (2)(n) applies to the property". Protected money includes exempt money which, by definition, comprises the amounts, damages or compensation covered by or referred to in ss 116(2)(d)(ii), 116(2)(d)(iv), 116(2)(g), 116(2)(k), 116(2)(l), 116(2)(m), 116(2)(ma) or 116(2)(mb): s 116(2D). Put simply, property acquired by the bankrupt using protected money is not property available for payment of a bankrupt's debts.

Division 4 - Realization of property 17 Division 4 deals with realization of a bankrupt's property. Under s 129, a trustee takes possession of all property of a bankrupt capable of manual delivery, including all deeds, books and documents. Section 134, entitled "Powers exercisable at discretion of trustee", provides that subject to the Act, a trustee, amongst other things, may "make such allowance out of the estate as he or she thinks just to the bankrupt, the spouse or de facto partner of the bankrupt or the family of the bankrupt": s 134(1)(ma).

Division 4B - Contribution by bankrupt and recovery of property 18 As noted above, the other relevant Division in Pt VI is Div 4B, entitled "Contribution by bankrupt and recovery of property". It was enacted in 1992. The objects of Div 4B are set out in s 139J: (a) to require a bankrupt who derives income during the bankruptcy to pay contributions towards the bankrupt's estate; and (b) to enable the recovery of certain money and property for the benefit of the bankrupt's estate. (Emphasis added.) 19 There are a number of defined words and phrases in Div 4B. 20 "Income", in Div 4B of Pt VI in relation to a bankrupt, "has its ordinary meaning" subject to specific qualifications in s 139L(1) which include: (a) the following are income in relation to a bankrupt (whether or not they come within the ordinary meaning of "income"): (i) an annuity or pension paid to the bankrupt from a provident, benefit, superannuation, retirement or approved deposit fund; (ia) an annuity or pension paid to the bankrupt from an RSA; (ii) a payment to the bankrupt in consequence of a termination of any office or employment; (iii) an amount of annuity or pension received by the bankrupt under a policy of life insurance or endowment insurance; (iv) an amount received by the bankrupt as a beneficiary under a trust to the extent that the amount was paid out of income of the trust; (v) the value of a benefit that: (A) is provided in any circumstances by any person (the provider) to the bankrupt; and (B) is a benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 as in force at the beginning of 1 July 1992 (other than a benefit that would be an exempt benefit for the purposes of that Act if the provider were the employer of the bankrupt as an employee and the provider had provided the benefit in respect of the employment of the bankrupt); being that value as worked out in accordance with the provisions of that Act but subject to any modifications of any provisions of that Act made by the regulations under this Act; (vi) the value of a loan made to the bankrupt by an associated entity of the bankrupt, including: (A) a loan under which the loan money is not paid to the bankrupt, but is paid or applied at the bankrupt's direction; and (B) a loan that is not enforceable at law or in equity; (vii) the amount of any money, or the value of any other consideration, received by a person other than the bankrupt from another person as a result of work done or services performed by the bankrupt, less any expenses (other than expenses of a capital nature) necessarily incurred by the first-mentioned person in connection with the work or services; (b) the following are not income in relation to a bankrupt (even if they come within the ordinary meaning of "income"): (i) an amount paid to the bankrupt: (A) from the Child Support Account established under the Child Support (Registration and Collection) Act 1988; or (B) from another source for the maintenance of children of whom the bankrupt has custody; or (iv) a payment to the bankrupt under: (A) a legal aid scheme or service established under a law of the Commonwealth or of a State or Territory of the Commonwealth; or (B) a legal aid scheme or service approved by the Attorney-General for the purposes of paragraph 2(4)(a) of the Federal Court of Australia Regulations; or (C) any other legal aid scheme or service established to provide assistance to people on low incomes; (v) a payment or amount that the regulations provide is not income of the bankrupt. … (Emphasis added.) 21 "Derivation of income" is addressed in s 139M as follows: (1) Income is taken to be derived by a bankrupt for the purposes of this Division even though it is not actually received by the bankrupt because: (a) an amount is deducted from it, or it is wholly or partly otherwise applied, under a law of the Commonwealth, of a State or of a Territory; or (b) it is reinvested, accumulated or capitalised; or (c) it is dealt with on behalf of the bankrupt or as the bankrupt directs. (2) A reference in this Division to the income that a bankrupt is likely to derive during a contribution assessment period includes a reference to income that the bankrupt has derived during that period. (3) A reference in this Division to income derived by a bankrupt during a contribution assessment period includes a reference to income so derived in respect of work done or services performed by the bankrupt before that period or work to be done or services to be performed by the bankrupt after that period. 22 Section 139P deals with the liability of the bankrupt to pay contributions. It provides: (1) Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment exceeds the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is liable to pay to the trustee a contribution in respect of that period. (2) Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment does not exceed the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is not liable to, but may if he or she so wishes, pay to the trustee a contribution in respect of that period. 23 Section 139S contains the formula for working out a bankrupt's contribution. It provides: The contribution that a bankrupt is liable to pay in respect of a contribution assessment period is the amount worked out in accordance with the formula: Assessed income - Actual income threshold amount 2 where: Assessed income means the amount assessed by the trustee to be the income that the bankrupt is likely to derive, or derived, during the contribution assessment period. Actual income threshold amount means the actual income threshold amount assessed by the trustee to be applicable in relation to the bankrupt when the assessment is made. "Actual income threshold amount" and "base income threshold amount" are defined in s 139K. For present purposes, it is sufficient to note that the base income threshold amount is 3.5 times the maximum basic pension rate for a person who is partnered and the actual income threshold amount is the base income threshold amount if the bankrupt has no dependants. If the bankrupt does have dependants, the actual income threshold amount increases - by 18% for one dependant, up to by 36% for more than four dependants.

ARGUMENT AND ANALYSIS 24 Mr Di Cioccio contended that when a bankrupt acquires property using money or a credit to a bank account representing income previously derived during the bankruptcy that was below the actual income threshold amount (as he did), there is a conflict between the operation and effect of Div 4B of Pt VI of the Act, and s 58(1)(b) in Div 4 of Pt IV and s 116 in Div 3 of Pt VI of the Act. Mr Di Cioccio submitted that the conflict should be resolved by ss 58 and 116 "giving way" to Div 4B of Pt VI with the result that the Shares he acquired were not "after-acquired property" which vested in the Official Trustee under s 58(1) of the Act. 25 For the reasons that follow, that contention is rejected. 26 The issue has been averted to in some decided cases (see eg, Re Gillies; Ex parte Official Trustee in Bankruptcy v Gillies (1993) 42 FCR 571; Re Hawkins; Ex parte Worrell (1996) 71 FCR 371; Re Sharpe; Ex parte Donnelly (1998) 80 FCR 536; Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380; Rodway v White [2009] WASC 201; Barwick v Goodridge [2011] NSWSC 1233 and De Santis v Aravanis [2014] FCA 1243) but has not been decided authoritatively. 27 The question must be decided by this Court as a question of statutory construction. The task of construction must "begin with a consideration of the [statutory] text": Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39]. That starting point requires the Court "to apply the ordinary and grammatical sense of the statutory word(s) to be interpreted having regard both to text and perhaps also context as well as legislative purpose": Screen Australia v EME Productions No 1 Pty Ltd (2012) 200 FCR 282 at [43], citing Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at [4] and also at [47]. 28 Section 58 is in Div 4 of Pt IV of the Act: see [8] above. It contains the general rule for the vesting of property when a debtor becomes a bankrupt. The general rule is "[s]ubject to this Act". The section deals with the property of a bankrupt at the time of becoming bankrupt (subs (1)(a)) as well as "after-acquired property of the bankrupt" (subs (1)(b)). As s 58(1)(b) states, after-acquired property of the bankrupt vests in the Official Trustee (or the trustee of the bankrupt's estate) as soon as it is acquired by, or devolves on, the bankrupt. As we have seen, after-acquired property is defined in s 58(6) for the purposes of s 58 to mean "property that is acquired by… the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt": see [11] above. 29 That last phrase, property [that is] divisible amongst the creditors of the bankrupt, is specifically addressed in s 116 of Div 3 of Pt VI of the Act: see [13] above. That section identifies, subject to other provisions of the Act, the property that is divisible (s 116(1)), and that which is not divisible (s 116(2)), amongst the bankrupt's creditors. 30 The nature of the property (whether it is divisible amongst creditors or not) determines whether or not the property vests in the trustee. If an item of property is of a kind which is divisible amongst the creditors of a bankrupt (s 116(1)), it vests in the trustee. If it is property of a kind which falls within one of the categories listed in s 116(2), it is entitled to be retained by the bankrupt. Section 116(1) is broad. It includes property that has been acquired, or is acquired by, the bankrupt after the commencement of the bankruptcy and before discharge: s 116(1)(a). It is to be read, and is able to be read, with s 58 of the Act. 31 What s 116(2) does is limit the operation of s 116(1) by stating that s 116(1) does not extend to certain identified property. Generally, the effect of the provision is that a bankrupt is permitted to acquire and hold a range of items of property without that property vesting in the trustee and being divisible amongst the bankrupt's creditors. A review of the items of property listed in s 116(2) (and thereby excluded from the operation of s 116(1)) is instructive. For example, the items of property excluded and not divisible amongst a bankrupt's creditors include: (1) Property held by a bankrupt in trust for another person: s 116(2)(a); (2) Household property of particular kinds and quantities: s 116(2)(b)(i) read with reg 6.03 of the Regulations; (3) The bankrupt's property used by him or her in earning income by personal exertion, as limited by value: s 116(2)(c)(i) read with reg 6.03B(1) of the Regulations; (4) Property used by a bankrupt primarily as a means of transport, as limited by value: s 116(2)(ca) read with reg 6.03B(3) of the Regulations. 32 As will be apparent, the Act enables the bankrupt to retain specific property: including property which the bankrupt requires for day to day living, property used to earn income by personal exertion and a form of transport. At the same time, the Act limits the kinds and value of that property: see [31] above. The Act may be read as encouraging a bankrupt to commence re-establishing themselves but, until discharged, the Act does not permit a bankrupt to commence acquiring all kinds of assets to the detriment of a bankrupt's creditors. 33 Section 116(2) of the Act does not expressly refer to property representing income previously derived by an undischarged bankrupt or, for that matter, to property acquired by an undischarged bankrupt using property representing income previously derived by an undischarged bankrupt below the actual income threshold amount applicable to that bankrupt. The question of construction is whether one can discern from the scheme of the Act such an exemption? 34 The answer is no. As we have seen, ss 58 and 116 are concerned with property, not with the character of property as income or capital. The items of property able to be acquired and retained by an undischarged bankrupt are specified. If an item of property (for example, shares) is not listed in s 116(2) then it is caught by s 116(1) and is divisible amongst the bankrupt's creditors. What role then, if any, does Div 4B have to play in determining the property that is divisible amongst the bankrupt's creditors, and does it, as the appellant contends, conflict with ss 58(1)(b) and 116? Again, the answer is none. 35 Div 4B of Pt VI has two objects. They are set out in s 139J extracted at [18] above. For present purposes, it is sufficient to direct our attention to the first object - to require a bankrupt who derives income during the bankruptcy to pay contributions towards the bankrupt's estate. 36 Div 4B of Pt VI defines what is income (s 139L extracted at [20] above). It also: (1) Identifies that certain receipts are to be treated as derived in calculating a bankrupt's income: ss 139M and 139K (see definition of derived); and (2) Provides a formula for working out what contribution of that income (if any) a bankrupt is liable to pay: s 139S. 37 These provisions do not address what is, or what is not, the property of the bankrupt divisible amongst the bankrupt's creditors. The provisions are directed to different concepts. There is no conflict between Div 4B of Pt VI of the Act, and s 58(1)(b) in Div 4 of Pt IV and s 116 in Div 3 of Pt VI of the Act: cf Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [70]. 38 Why did the Shares acquired by the bankrupt vest in the Official Trustee? 39 As we have seen, a bankrupt is entitled to retain income derived below the actual income threshold amount applicable to the bankrupt: see [22]-[23]. Given that the actual income threshold amount applicable to a bankrupt is calculated by reference to pension rates, it is open to infer that it is an amount sufficient to enable a bankrupt to feed, house and clothe themselves and their dependents. However, Div 4B of Pt VI says nothing about how a bankrupt might spend that amount. 40 Conversely, ss 58 and 116 provide that after acquired property (except for the specific items of property listed in s 116(2), as read with the Regulations) vests in a bankrupt's trustee. The Act does not prohibit a bankrupt from acquiring a specific item of property. The Act simply deems that after-acquired property vests in the bankrupt's trustee, unless the property is of a kind specified in s 116(2). 41 During the course of argument, counsel for Mr Di Cioccio submitted that if this construction of the Act was adopted, it would create an anomaly. An anomaly was said to arise because an amount standing to the credit of a bank account in the name of the bankrupt would be property (see Foley v Hill (1848) 2 HL Cas 28 and [9]-[10] above) that would immediately vest in a trustee (s 58) and be divisible amongst the creditors of the bankrupt (s 116(1)) even if the amounts standing to the credit of the bank account were in fact income derived by the bankrupt below the actual income threshold amount applicable to that bankrupt. 42 There are a number of answers to that contention, all found in the Act. First, s 134(1)(ma) provides that, subject to the Act, a trustee may "make such allowance out of the estate as he or she thinks just to the bankrupt, the spouse or de facto partner of the bankrupt or the family of the bankrupt": see [17] above. Section 134 operates as a safety value. It is a provision which assumes that a trustee will act sensibly and fairly. A decision of the trustee is reviewable: s 178 of the Act. Second, it is not uncommon for a bankrupt to be required to open a supervised account: s 139ZIE of the Act. Under the supervised account regime, a bankrupt must not make a withdrawal from the supervised account unless, amongst other things, the bankrupt has the consent of the trustee: ss 139ZIG(1), (2)(a) and (3). The Act, or at least those provisions of the Act dealing with supervised accounts, suggests that the safety valve provided by s 134 is intended to operate in relation to a bank account into which income derived by the bankrupt below the actual income threshold amount applicable to that bankrupt is deposited. 43 Third, s 116 of the Act. The fact that an amount standing to the credit of a bank account in the name of the bankrupt would constitute after acquired property under s 116(1) is not a complete statement. If, for example, the bankrupt retained the credit balance in the bank account to build up sufficient funds to later buy tools of trade for use in earning income by personal exertion, the amount may arguably fall within the exception provided under s 116(2)(c) as "property that is for use by the bankrupt in earning income by personal exertion …". In this context, "property" is defined both for s 116(1) and s 116(2): see [9] above. There is no anomaly.

CONCLUSION 44 For those reasons, the appeal is dismissed with costs. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Edmonds, Gordon and Beach.