Official Receiver in Bankruptcy v Schultz

The High Court of Australia considered a dispute between the Official Receiver in Bankruptcy and the respondent, who was the applicant in family provision proceedings concerning a deceased estate. The core of the dispute concerned the nature of the respondent's interest in a devise of land, which had been subject to both bankruptcy proceedings and a family provision order.

The legal issues before the Court were whether the respondent's interest in the devised land, following a variation of a family provision order, constituted "property" divisible amongst creditors under the *Bankruptcy Act 1966* (Cth), and specifically whether the remainder interest in the land, after the respondent was granted a life interest, vested in the Official Receiver. The Court also had to determine the effect of a family provision order made under the *Succession Act 1981* (Qld) on the unadministered interest of a devisee in a deceased estate.

The High Court reasoned that the family provision order, even as varied, operated to divest the respondent of the full beneficial interest in the land, granting him only a life interest. The remainder interest, therefore, did not vest in the Official Receiver as part of the bankrupt's divisible property. The Court held that the interest of a beneficiary in an unadministered estate is a chose in action, and the family provision order effectively determined the extent of that interest. Consequently, the appeal was allowed, and the orders of the Full Court of the Supreme Court of Queensland were set aside and replaced with orders dismissing the appeal to that Court, with costs to be paid out of the deceased estate.