Metherell v Public Trustee in its Capacity as Executor of the Estate of the late Patricia Helen Peek

[2010] WASC 205

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   METHERELL -v- PUBLIC TRUSTEE in its Capacity as Executor of the Estate of the late PATRICIA HELEN PEEK [2010] WASC 205

CORAM:   EM HEENAN J

HEARD:   21 JUNE 2010

DELIVERED          :   21 JUNE 2010

PUBLISHED           :  9 AUGUST 2010

FILE NO/S:   CIV 1443 of 2010

BETWEEN:   GLEN EDWARD METHERELL

First Plaintiff

KELLIE ANNE SINGH
Second Plaintiff

HAYLEY JANE PEEK
Third Plaintiff

WARREN DANIEL PEEK
Fourth Plaintiff

AND

PUBLIC TRUSTEE in its Capacity as Executor of the Estate of the late PATRICIA HELEN PEEK
First Defendant

OFFICIAL TRUSTEE IN BANKRUPTCY in its Capacity as Trustee in Bankruptcy for the Bankrupt Estate of DENNIS HOWARD PEEK
Second Defendant

Catchwords:

Inheritance - Family provision - Will - Probate - Bankruptcy of principal beneficiary - Discharge from bankruptcy - No reassignment of bankrupt's property from trustee in bankruptcy - Proposed consent orders in favour of claimants - Need for consent from trustee or reassignment of bankrupt's former property

Legislation:

Inheritance (Family and Dependants Provision) Act 1972 (WA), s 7(1)(c)

Result:

Adjourned sine die
Costs reserved
There be general liberty to apply

Category:    B

Representation:

Counsel:

First Plaintiff                  :     Mr M P Bruce

Second Plaintiff             :     Mr M P Bruce

Third Plaintiff                :     Mr M P Bruce

Fourth Plaintiff              :     Mr M P Bruce

First Defendant              :     Ms E T Nixon

Second Defendant         :     No appearance

Solicitors:

First Plaintiff                  :     Lavan Legal

Second Plaintiff             :     Lavan Legal

Third Plaintiff                :     Lavan Legal

Fourth Plaintiff              :     Lavan Legal

First Defendant              :     Public Trustee (WA)

Second Defendant         :     No appearance

Case(s) referred to in judgment(s):

Bride & Anor as Trustees of the Pinwernying Family Trust v KMG Hungerfords (Unreported, WASC, Library No 940353, 14 July 1994)

Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178; (1990) 99 ALR 789

Gosden v Dixon (1992) 107 ALR 329

Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306

1. EM HEENAN J: The application by an originating summons issued under s 7(1)(c) of the Inheritance (Family and Dependants Provision) Act 1972 (WA) is for provision out of the estate of Mrs Patricia Helen Peek (dec), late of 3 Lachlan Road, Thornlie in favour of each of the four plaintiffs, Glen Edward Metherell, Kellie Anne Singh, Hayley Jane Peek and Warren Daniel Peek. The four applicants are the only four children of the deceased, and each has attained the age of 18 years.

2. Mrs Patricia Helen Peek died on 31 January 2009, leaving a will dated 28 November 1980 by which she left the whole of her estate to her former husband, Mr Dennis Howard Peek.  On 24 November 2009 the Public Trustee obtained probate of that will.  Mr Dennis Howard Peek had earlier been made bankrupt on 1 March 2007, that is, before the death of Mrs Patricia Helen Peek.  He later became discharged from that bankruptcy under the three‑year discharge regime on 2 March 2010 after Mrs Peek's death.  His trustee in bankruptcy was the Official Trustee in Bankruptcy.

3. The affidavits and submissions suggest that the Official Trustee in Bankruptcy makes no claim on his own behalf or on behalf of any of the creditors of Mr Dennis Howard Peek's bankrupt estate to the bankrupt's rights in distribution under the will of the deceased.  Indeed, the implications, but not any express concessions, are to the effect that the Official Trustee in Bankruptcy makes no claims of any kind in relation to the rights of the former bankrupt to distribution under this will.

4. Nevertheless, and notwithstanding his later discharge from bankruptcy, the rights in distribution of the sole beneficiary vested in the Official Trustee in Bankruptcy upon the bankruptcy and they remain vested in the Official Trustee in Bankruptcy notwithstanding the discharge.  That is clearly the law.  It was so established by the High Court of Australia in Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306 and has been followed on many other occasions, including decisions of the Full Court of this court such as Bride & Anor as Trustees of the Pinwernying Family Trust v KMGHungerfords (Unreported, WASC, Library No 940353, 14 July 1994) and in New South Wales in Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178; (1990) 99 ALR 789 and Gosden v Dixon (1992) 107 ALR 329.

5. These authorities establish that in the present case, where property of the bankrupt remains vested in the trustee in bankruptcy notwithstanding a later discharge from bankruptcy, it is possible for court proceedings, including proceedings under the Inheritance (Family and Dependants Provision) Act, to continue and for orders to be made, the effect of which will modify the rights and distribution under the will and in the bankruptcy.  As I have pointed out to counsel, that could conceivably be done in the present situation.

6. The difficulty about pursuing that course is that the appearances are that the Official Trustee in Bankruptcy does not fully recognise this or, alternatively, does not desire to contest these proceedings, because it has been assumed that Mr Dennis Howard Peek does not wish to make any claim to distribution under his former wife's will.  Unless his interest in distribution under Mrs Patricia Helen Peek's will were to be reassigned from the Official Trustee in Bankruptcy to Mr Dennis Howard Peek, any expressions of view or submissions by Mr Dennis Howard Peek do not count for consideration because, at present, he has no personal rights in distribution.

7. If, however, the entitlement in distribution were to be reassigned by the Official Trustee in Bankruptcy to Mr Dennis Howard Peek, Mr Dennis Howard Peek could then be substituted or added as defendant and his lack of opposition to the applications by the plaintiffs would allow proceedings to be pursued with better prospects of success, or even, possibly, by consent in favour of the plaintiffs.

8. It seems, therefore, that in view of the situation which has developed, this hearing should be adjourned to allow the plaintiffs to take steps to encourage Mr Dennis Howard Peek to seek a reassignment of his rights to distribution from his wife's estate to him by the Official Trustee in Bankruptcy and, if that occurs, for him to be joined as an additional defendant or in place of the second defendant in these proceedings.  If and when that occurs, then the proceedings can be brought on for final determination.  Should it be the case that Mr Dennis Howard Peek has no opposition to the relief claimed by the plaintiffs, then the proceedings could be dealt with by consent so much more quickly and cheaply.

9. If the Official Trustee in Bankruptcy is not prepared to assign the interests in distribution to the former bankrupt, then the proceedings will need to continue with the Official Trustee in Bankruptcy as the sole residuary beneficiary.  In that case, more consideration may need to be given by the Official Trustee in Bankruptcy as to whether or not it wishes to be represented and oppose the application and, if so, for whose benefit.  I make no observations as to whether or not it should take that course, but those are matters for resolution in what are some unfinished procedures in the bankruptcy.

10. I consider, in the circumstances, that the best order to make is to adjourn the proceedings sine die; to direct that the costs of the hearing today be costs reserved as part of the administration; and to give general liberty to apply.  I would be sympathetic to any application to bring the matter on again at short notice and, if thought appropriate, before me because of familiarity with the matter once these procedural issues have been further examined.