(a) A Nissan motor vehicle valued at at least $6,000.

(b) A computer and software valued at $2,000.

(c) A box trailer valued at $300.

(d) Cameras valued at $300.

(e) Tools of trade valued at $2,950.

(f) A motor bike valued at $400.

(g) Personal effects and clothing of no significant value.

4. The bankrupt owed the Australian Central Credit Union the sum of $12,000 and evidence of the bankrupt in the Family Court was that his current debts were $24,000, which probably included the debt to the Australian Central Credit Union. In other words, the result of the Family Court order was to exacerbate, if not to bring about, his insolvency.

5. The explanation for the apparently large order that was made by the Family Court lies in the fact that the bankrupt was a member of the Commonwealth superannuation scheme, by virtue of the fact that he was employed by the Civil Aviation Authority as an aviation rescue fire fighter. He had no intention of retiring from that occupation. As an employee of the Commonwealth he had contributed $10,480.66 and, in the event that he had retired as at 30 June 1989, would have had a total entitlement of $22,604.75.

6. Nicholson C.J. was of the view that the matrimonial "property" should be divided as to 70% in favour of the wife and 30% in favour of the husband. His Honour estimated that the total matrimonial property amounted to $31,050. This figure took into account the superannuation entitlement of the bankrupt, which his Honour estimated to have a present value of $18,000. This amount his Honour referred to in the judgment as a "resource".

7. The wife now realises that she faces the prospect of being an unsecured creditor with a right in proof in the estate. The Official Receiver, the Trustee of the bankrupt's estate, in a notice to creditors given on 14 June 1990 advised that there was a deficiency of assets over liabilities in the estate of $42,930 and that no dividend would be paid in the estate.

8. The wife now seeks the leave of the court, pursuant to s.58(3)(b) of the Bankruptcy Act 1966 ("the Act"), to commence proceedings pursuant to s.79A of the Family Law Act 1975 against the bankrupt to set aside or vary the order made by Nicholson C.J. and in lieu thereof to obtain an order that the wife be entitled to 70% of the value of the bankrupt's benefit when vested in him, or $12,600 plus interest to be paid to her upon the vesting of the superannuation benefit in the husband, as well as incidental orders.

9. In the alternative, the wife requests an order that the application to this court be transferred to the Family Court of Australia pursuant to s.35A of the Act, for that court to exercise concurrently, it may be assumed, with the hearing of the matrimonial matter. It seems to me that no real purpose would be served to remit the present application to the Family Court of Australia, and that such action would merely increase the costs of the parties, particularly as the matter was argued fully before me.

10. Two questions accordingly arise for decision. The first is whether the leave of the court is required in such circumstances; the second is, if the first be answered in the affirmative, whether such leave should in the circumstances be given.

11. Section 58(3) provides:

"(3) Except as provided by this Act, after a

debtor has become a bankrupt, it is not

competent for a creditor -

...

(b) except with the leave of the Court and on

such terms as the Court thinks fit, to

commence any legal proceeding in respect

of a provable debt or take any fresh step

in such a proceeding."

12. The provable debt, in respect of which it is said the Family Court proceedings would be brought, is the sum of $18,358 which, if an appropriate order of the Family Court were obtained could, depending upon the terms in which that order was couched, cease to be a debt at all, so that the right to prove was extinguished.

13. Notwithstanding submissions to the contrary by the bankrupt, I am of the view that the proceedings contemplated to be brought in the Family Court were proceedings "in respect of" the provable debt. Just as in s.60 of the Act, so too in s.58, the words "in respect of" will be given a wide meaning: cf Tarea Management (North Shore) Pty Ltd (in liquidation) v Glass (1991) 28 FCR 93 at 100. As was said by Mann C.J. in Trustees Executors and Agency Co Ltd v Reilly [1941] VicLawRp 22; (1941) VLR 110 at 111, the words "in respect of" have the:

"...widest possible meaning of any expression

intended to convey some connection or relation

between the two subject matters to which the

words refer."

14. The policy of s.60 of the Act is discussed in Tarea Management (supra at 96-98) by the full court of this court and by Gibbs C.J. in Storey v Lane [1981] HCA 47; (1981) 147 CLR 549 at 557. In the latter case his Honour said of that policy, that it was:

"to assist in ensuring that the assets of the

insolvent debtor are distributed in the

interests of creditors generally, to prevent one

creditor obtaining an undue advantage over the

others, and to prevent the scheme of the

Bankruptcy Act from being defeated."

15. So, in s.60 of the Act, it is provided, inter alia, that the court may at any time after the presentation of a petition stay any legal process, whether civil or criminal, instituted against the person or property of a debtor, "in respect of" the non-payment of a provable debt. Section 58(3) prohibits the commencement of, or the taking of a fresh step in, proceedings that meet the description of being "in respect of" a provable debt. Together these sections ensure that the policy of the Act, as described by Gibbs C.J., is given effect to. To give the words "in respect to" a narrow construction would assist in defeating the policy of the Act, rather than to promote it.

16. Some support for the view that s.58(3) applies in a case such as the present can be obtained from the exclusion from the necessity of consent being obtained under the subsection of liability under maintenance agreements or orders (see s.58(5A) of the Act).

17. The question then remains whether leave should in the present case be given.

18. The modern bankruptcy law serves three purposes. The first is to ensure that the assets of the bankrupt are distributed rateably among creditors. The second, which is interrelated to the first, is to ensure that one creditor does not obtain an undue advantage over other creditors. The third, is to bring about the discharge of the debtor from future liability for his existing debts, so that the debtor may start afresh: Storey v Lane (supra at 556).

19. A grant of leave in the present case would scarcely advance the third purpose of the legislation. What the wife seeks to do here is to seek the order of a court which will effectively defer the liability and take it out of the category of provable debts, so that the bankrupt, upon discharge, will continue to be liable for an equivalent amount.

20. For the wife it was argued that no detriment could accrue to the estate because the proceeds of the superannuation benefit do not form part of the estate of the bankrupt. That is certainly true at the present time. The entitlement to benefit does not represent property that belonged to, or was vested in, the bankrupt at the commencement of the bankruptcy, nor, it may be said, does the bankrupt have a capacity to exercise power over it for his benefit within s.116(1)(b) of the Act. However, it can not be said that the proceeds could never become property divisible among creditors.

21. While nothing before me indicates whether the bankrupt is now subject to the Superannuation Act 1976 in respect of some part of his benefit, or whether the whole of the benefit is now subject to the provisions of the Superannuation Act 1990, under either legislative scheme benefits on retirement may be taken wholly or in part as a lump sum, or may be taken in the form of a pension. If the bankrupt were to leave the employment of the Commonwealth, or perhaps in circumstances of invalidity and prior to discharge, receive a lump sum, that amount would be after acquired property and thereupon form property divisible among creditors. Likewise, if the bankrupt were to receive a pension from the scheme prior to discharge, the amount would be "income" and subject to the possibility of there being made an order under s.131 of the Act. In either of these two events, the proceedings now contemplated by the wife would result in her obtaining an advantage to the detriment of other creditors. Again the grant of leave to commence proceedings would work in a way contrary to the policy of the legislation.

22. There is a third matter which I take into account in determining whether leave should be given. The proceedings before Nicholson C.J. were contested proceedings brought on behalf of the wife. She was represented by counsel and had the opportunity to make submissions to his Honour as to the form the order should take. In the result she is now dissatisfied as to the form of those orders, which have left her as a creditor with a right to prove in the estate. Yet it must have been apparent at the time that the effect of the making of the orders was to leave the husband insolvent and with no possibility of paying the sum of $18,358 unless he in fact retired from his job and became unemployed. That being the order sought, and granted, I see no reason why leave should be granted to the wife now to undo, if she can, the effects of that order, so far as they concern herself. In so saying I am prepared to accept that the Family Court might well, if the matter were allowed to proceed, set aside the order made and vary it in a way that would ensure that some amount became payable to her upon the bankrupt being entitled to a benefit under the fund.

23. I would accordingly dismiss the application and order the wife to pay the costs of the bankrupt and of the official receiver.