Re Pevsner, Michael Reginald Ex Parte Offical Trustee In Bankruptcy & Anor [1983] FCA 119

Federal Court of Australia|1983-06-23|Before: Sheppard J

Bankruptcy - After acquired property - Bankrupt entitled to interest in mother's estate - Mother dying after bankruptcy - Bankrupt discharged before estate fully administered - Entitlement of Trustee to chose in action for proper administration of estate and to the Bankrupt's

interest in the estate on its being fully administered.

AND: RAYMOND HENRY GRIFFITHS as Administrator of the Estate of Cora Mahrea Pevsner, deceased.

AND: RAYMOND HENRY GRIFFITHS as Administrator of the Estate of Cora Mahrea Pevsner, deceased

This is an application by the Trustee in Bankruptcy of the estate of one Michael Reginald Pevsner for a declaration that all the right title and interest of the bankrupt to the gifts made under the will of his mother, Cora Mahrea Pevsner, be deemed to be included

3 November, 1976. On 30 January, 1979, his mother died.

By her will she gave the whole of her property to be divided amongst her children living at her death in equal shares as tenants in common. There were two such children, one being the bankrupt. His share is likely to yield an amount somewhat more than $50,000. On 4 December, 1979, letters of administration with

the will annexed were granted to one Raymond Griffiths.

On 1 February, 1981, the bankrupt was discharged from his bankruptcy. At that time the estate of his mother had not been fully administered. On 6 September, 1982, the bankrupt died. Probate of his will was granted to the executor named therein,

Both the administrator of the mother's estate and the executor of the bankrupt's will have been joined as respondents to the application. The matter was argued before the grant of probate to Mr. Kennedy. I informed the parties that it would be inappropriate for the Court to make any orders until after the grant had been obtained. On 10 June last the executor appeared personally and confirmed, what he had previously indicated, namely that he submitted to such order as the Court saw fit to make. The application was

nevertheless opposed by Mr. Griffiths, the administrator

of the mother's estate. Both he and Mr. Kennedy in their representative capacities seek orders that the costs of the two estates be paid out of the bankrupt's estate. Their application is not opposed by the

The claims of creditors of the bankrupt and the costs of the administration of his estate amount to something over $63,000. Thus, if the trustee is successful in the application he makes, there will

The directly relevant sections of the Bankruptcy Act 1966 are ss. 58 and 116. Section 58 provides for the vesting of property already vested in the bankrupt at the time of his bankruptcy and of after-acquired property in his trustee. Paragraph

"58(1) Subject to this Act, where a debtor becomes a bankrupt -

(b) after-acquired property of the bankrupt vests, as soon as 1t is acquired by, or devolves on, the bankrupt, 1n the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee."

(a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bank- ruptcy, or has been acquired or is acquired by him, or has devolved or devolves on him, after the commencement of the bankruptcy and before his discharge; and

(b) the capacity to exercise, and to take proceedings for exercising, all such powers in, over or in respect of property as might have been exercised by the bankrupt for his own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his discharge,

1s property divisible amongst the creditors of the bankrupt."

The expressions "property" and "the property of the bankrupt" are defined in s.5 of the Act which commences with the usual words, "In this Act, unless the contrary intention appears - ". "Property" means 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

bankrupt" means the property divisible amongst the creditors of the bankrupt and includes any rights and powers in relation to that property that would have been exercisable by the bankrupt if he had not become

Section 153 of the Act provides for the effect of an order of discharge. The discharge operates to release a bankrupt from all debts provable in the bankruptcy. The section does not affect any rights to the bankrupt's property which passed to the trustee by reason of the provisions of ss.58 and 116. And by s.152 a discharged bankrupt, notwithstanding his discharge, is obliged to give such assistance as the trustee reasonably requires in the realisation and distribution of such of his property as is vested in

The authorities plainly establish that at the date of the bankrupt's discharge from bankruptcy he had no interest in the property left by his mother. The administration of her estate was not complete. He did, however, have a chose in action against the administrator for the due administration of her estate. That, of course, is subject to such operation as should be accorded ss.58 and 116 in the circumstances of this

Sudeley v. Attorney-General (1897) A.C. 11 and Commissioner of Stamp Duties (Queensland) v. Livingston (1965) A.C. 694. In the latter case Viscount Radcliffe who delivered the judgment of the Privy Council said of the beneficiary in that case that she was not entitled to any beneficial interest in any property in Queensland

"What she was entitled of in respect of her rights under her deceased husband's will was a chose in action, capable of being invoked for any purpose connected with the proper administration of his estate".

Counsel for the administrator submitted, upon the basis of these authorities, that there was no property which had vested in the trustee prior to the bankrupt's discharge on 1 February, 1981. But, so ut seems to me, the chose in action for the due administra- tion of the estate itself was property for the purposes of the relevant provisions in s.58 and s.116. The word "property", as the definition earlier referred to shows, should be given a wide meaning. It must certainly include choses in action. In a more simple situation it would pick up a chose in action consisting of a debt

Once this 1s understood it seems to me, particularly by reason of the provisions of paragraph (a) of sub-section 116(1) of the Act earlier set out, that the chose in action to which Lord Radcliffe referred became vested 1n the trustee upon the grant of letters of administration in the mother's estate on 4 December, 1979, that is more than twelve months prior

The trustee being seized or possessed of such chose in action, is the only person entitled to enforce it and becomes, because of it, entitled to the moneys which will arise when the estate is distributed. If this view were incorrect the chose in action, although vested in the trustee and still vested in the trustee at the time of the discharge, would be of no practical value. The position is no different from that which arises where a beneficiary in an estate has assigned his interest therein, whether by way of charge or otherwise. The assignee 1s entitled not only to the chose in action but to the beneficial 1unterest in the property which the assignor would otherwise have been entitled to on the estate being fully administered.

It is trite to say that a chose in action 1s "a right

enforceable by action"; Loxton v. Moir (1914) 18 C.L.R.

360 per Rich J. at p.379. Where there is an assignment

of a chose in action, it is the assignee who becomes

Accordingly it is the trustee in bankruptcy to whom the administrator of the mother's estate must

I declare that all the right title and interest of Michael Reginald Pevsner who was made bankrupt on 3 November, 1976, to the gifts made under the will of Cora Mahrea Pevsner, deceased, who died on

30 January, 1979, formed part of the property of the

the two respondents be paid out of the estate of the

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Court

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Judgment (37 paragraphs)

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