BANKRUPTCY - application for directions - matter arising in connection with the administration of estate - claim for repayment - whether appropriate for directions
Bankruptcy Act 1966 s134(4)
Re: Driller (1972) 21 FLR 159
RE: NEIL JAMES DUCKWORTH; EX PARTE OFFICIAL TRUSTEE IN BANKRUPTCY NO WAG 1465 OF 1993
R D NICHOLSON J PERTH 20 OCTOBER 1995
IN THE FEDERAL COURT OF AUSTRALIA ) LIMITED DISTRIBUTION
WESTERN AUSTRALIA DISTRICT REGISTRY )
GENERAL DIVISION ) NO WAG 1465 OF 1993
B E T W E E N:
RE:NEIL JAMES DUCKWORTH
EX PARTE:OFFICIAL TRUSTEE IN BANKRUPTCY
Applicant
and
NEIL JAMES DUCKWORTH
Respondent
MINUTE OF ORDER
JUDGE MAKING ORDER: R D NICHOLSON J
DATE OF ORDER: 20 OCTOBER 1995
WHERE MADE: PERTH
THE COURT ORDERS THAT:
The application dated 21 August 1995 be dismissed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA ) LIMITED DISTRIBUTION
WESTERN AUSTRALIA DISTRICT REGISTRY )
GENERAL DIVISION ) NO WAG 1465 OF 1993
B E T W E E N:
RE:NEIL JAMES DUCKWORTH
EX PARTE:OFFICIAL TRUSTEE IN BANKRUPTCY
Applicant
and
NEIL JAMES DUCKWORTH
Respondent
CORAM:R D NICHOLSON J
DATE:20 OCTOBER 1995
PLACE:PERTH
REASONS FOR JUDGMENT R D NICHOLSON J:
This is an application made pursuant to s134(4) of the Bankruptcy Act 1966 ("the Act") which provides that "the trustee may at any time apply to the Court for directions in respect of a matter arising in connexion with the administration of the estate".
The matter in respect of which the applicant seeks directions is:
"Whether the Applicant should return to Norwich the remaining balance of the sum of $26,014.00 received by the applicant from Norwich on 10 June 1995."
"Norwich" is a reference to Norwich Life Australia Limited ("Norwich").
Affidavit evidence establishes that on 4 or 5 October 1992 the respondent signed a Norwich "Proposal for Disability Income Assurance" form ("the Proposal") in which he indicated that his income over the last twelve months was $25,000.00 per month.
Norwich requested substantiation of the respondent's income claimed in the Proposal. Chartered Accountants on behalf of the respondent submitted to Norwich's agent a copy of minutes of a meeting of the directors of Gibchell Pty Ltd, held on 30 December 1992 and signed by the respondent as Chairman, which stated that the directors had passed a resolution to pay the respondent a salary of $200,000.00 per annum from 1 January 1993.
Norwich issued a Disability Income Insurance Policy ("the Policy") to the respondent based on the Proposal.
On 14 July 1993 the respondent completed a Norwich "Disability Income Insurance Claim Form" ("the Claim") in which he declared his average monthly earnings for the past twelve months to be $26,000.00.
Pursuant to the Claim, Norwich made payments ("the Payments") totalling $102,319.40 to the respondent and further payments of $40.00 to a bank and $26,014.00 to the applicant on behalf of the respondent. The latter payment was made in response to a notice issued by the applicant…
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.
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Details
AGLC
Re Duckworth, Neil James Ex Parte Official Trustee in Bankruptcy [1995] FCA 840
Case
[1995] FCA 840
Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, the case of Re Duckworth, Neil James Ex Parte Official Trustee in Bankruptcy was heard by Justice R D Nicholson. The Official Trustee in Bankruptcy, acting as the applicant, sought directions from the Court regarding the repayment of a remaining balance of $26,014.00 received from Norwich Life Australia Limited (Norwich) on behalf of the respondent, Neil James Duckworth. The application was made under s134(4) of the Bankruptcy Act 1966, which allows a trustee to apply to the Court for directions in matters arising in connection with the administration of an estate.
The central legal issue in this case was whether the Court should provide directions on the repayment of the remaining balance to Norwich. The applicant sought directions on whether the sums paid by Norwich to or on behalf of the respondent were "income" within s139L of the Act and whether they were "divisible property" of the respondent within s116(1) of the Act. However, it was accepted that these matters involved the resolution of legal questions rather than simple directions in connection with the administration of the estate.
Justice R D Nicholson concluded that the matter was unsuitable for directions under s134(4) of the Act. The Court found that the application for directions should be dismissed as the matter involved complex legal and factual issues, including questions of evidence and law. The Court also noted that Norwich had not appeared or established their claim, and the respondent had not filed affidavit evidence or contested certain facts. The Court was of the opinion that the matter could only be resolved in an appropriate legal proceeding rather than by way of directions under s134(4).