Palmer v Public Trustee - [1916] HCA 45

THE PUBLIC TRUSTEE

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES. Bankruptcy-Life assurance policy effected by bankrupt-Protection from creditors-

After-acquired property-Life, Fire, and Marine Insurance Act 1902 (N.S.W.) (No. 49 of 1902), secs. 4, 5, 7-Bankruptcy Act 1898 (N.S.W.) (No. 25 of 1898), secs. 3, 10, 52.

Sec. 4 of the Life, Fire, and Marine Insurance Act 1902 (N.S.W.) provides that ** The property and interest of every person who has effected, or shall hereafter effect, any policy for an insurance bona fide upon the life of himself

, and the property or for any future endowment for himself and interest of the personal representatives of himself policy, or in the moneys payable thereunder or in respect thereof, and in the

21 CLR 646

contributions made towards the same, shall be exempt from any law now or hereafter in force relating to insolvency or bankruptcy, or from being seized or levied upon by or under the process of any Court whatever." Sec. 5 provides that "A policy for life insurance or endowment or the contributions made towards the same shall not be protected under the last preceding section until such policy has endured for at least two years, after which period such pro- tection shall be afforded to the extent of two hundred pounds of insurance or endowment, and after an endurance of five years to the extent of five hundred pounds, and after an endurance of seven years to the extent of one thousand pounds, and after an endurance of ten years to the extent of two thousand pounds."

Held, by Isaacs, Gavan Duffy and Rich JJ. (Griffith C.J. and Barton J. dissenting), that sec. 4 of that Act has no application to a policy of life assur- ance effected by a bankrupt after his adjudication of bankruptcy, and therefore, that in the case of a policy SO effected the whole of the policy moneys payable on the death of the bankrupt while still uncertificated belonged to his official assignee notwithstanding that the policy had endured for more than ten years.

Decision of the Supreme Court of New South Wales (Street J.): Re Rygate, 16 S.R. (N.S.W.), 129, reversed.

APPEAL from the Supreme Court of New South Wales.

In the Supreme Court of New South Wales, in its bankruptcy jurisdiction, a motion was heard whereby William Harrington Palmer, official assignee of Robert Edward Rygate, deceased, a bankrupt, asked for an order declaring that he, the official assignee, was entitled as against the Public Trustee, who was the administrator of the deceased, to the proceeds of a certain policy effected by the deceased while bankrupt on his own life, and for an order directing the Public Trustee, to whom the proceeds had, by arrangement, been paid, to pay the amount of such proceeds to the official assignee, or in the alternative for an order declaring that the official assignee was entitled as against the Public Trustee to be paid out of the proceeds of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Palmer v Public Trustee

Details

AGLC: Palmer v Public Trustee [1916] HCA 45
Case: [1916] HCA 45
Decision Date: 31 August 1916

CaseChat Overview and Summary

The High Court of Australia heard an appeal from the Supreme Court of New South Wales concerning the entitlement to the proceeds of a life assurance policy. The appellant was the official assignee of a deceased bankrupt, Robert Edward Rygate, and sought to claim the policy moneys. The respondent was the Public Trustee, acting as the administrator of the deceased's estate. The dispute arose because Rygate had effected the life assurance policy on his own life after he had been adjudicated bankrupt.

The central legal issue before the High Court was whether section 4 of the *Life, Fire, and Marine Insurance Act 1902* (NSW) protected a life assurance policy effected by a bankrupt after their adjudication. Specifically, the Court had to determine if the "property and interest" of a bankrupt in such a policy was exempt from bankruptcy laws, or if the policy constituted after-acquired property that vested in the official assignee. The Court also considered the interplay between section 4 and section 5 of the same Act, which stipulated conditions regarding the duration of the policy for protection to be afforded.

A majority of the High Court, comprising Isaacs, Gavan Duffy, and Rich JJ., held that section 4 of the *Life, Fire, and Marine Insurance Act 1902* (NSW) did not apply to a life assurance policy effected by a bankrupt after their adjudication. Their Honours reasoned that while section 4 broadly exempted the "property and interest" in a policy from bankruptcy laws, an uncertificated bankrupt does not possess any personal property rights in after-acquired assets; rather, such assets are acquired for the benefit of the official assignee. Therefore, in the case of a policy effected post-bankruptcy, there was no "property or interest" in the bankrupt to which section 4 could attach. The majority found that the policy moneys belonged to the official assignee, notwithstanding that the policy had endured for more than ten years. Griffith CJ and Barton J dissented, holding that section 4, read in conjunction with section 5, provided protection to policies effected after bankruptcy, with the extent of protection being qualified by the policy's duration.

The High Court, by majority decision, reversed the decision of the Supreme Court of New South Wales. The appeal was allowed, and an order was made declaring that the official assignee was entitled to the proceeds of the policy.

Orders