PETER ANDREW GILLIES Ex parte: THE OFFICIAL TRUSTEE IN BANKRUPTCY; the Trustee of the property of PETER ANDREW GILLIES No. 496 of 1991 FED No. 409 Number of pages - 6 Bankruptcy (1993) 115 ALR 631 (1993) 42 FCR 571
COURT
IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA GENERAL DIVISION French J(1)
CATCHWORDS
Bankruptcy - after-acquired income - whether vests in trustee - consideration of legislative scheme for requiring contributions of income - continuing assumption that income does not vest in the trustee - accumulated after-acquired income available for composition.
Solicitors for the Applicant: Australian Government Solicitor
ORDER
THE COURT ORDERS THAT:
1. The sum of $4,000 accumulated from the income of the bankrupt since 1 July 1992 is not after-acquired property of the bankrupt which vests in the Official Trustee pursuant to s.58(1)(a) and
2. The sum of $4,000 accumulated from his income by the bankrupt since 1 July 1992 can be offered to his known creditors in the form of a composition proposal.
Note: Settlement and entry of Orders is dealt with in Rule 124 of the Bankruptcy Rules.
JUDGE1
FRENCH J On 4 April 1991, Peter Andrew Gillies, who is a professional diver, became a bankrupt upon acceptance by the Registrar in Bankruptcy of his debtor's petition filed on that date. At the time of his bankruptcy he was employed by the Department of Defence at the Naval Base, HMAS Stirling. His unsecured creditors as disclosed in the statement of affairs were owed a total of $22,000. His assets comprised a 1965 Holden HQ motor vehicle said to be worth $800, $6 cash and a Defence Force Retirement and Death Benefit valued at $8,000.
At present Mr Gillies works as a contract diver for periods which generally range between two and six weeks. He works offshore with little or no expenses during these periods as all outgoings are provided by his employers. The Official Trustee has assessed Mr Gillies' income for the purposes of sub-division C of Part VI of the Bankruptcy Act for the period 1 July 1992 to 30 June 1993 and ascertained that he is liable to pay a contribution to the Trustee of $3,865 for that financial year. $1,932 has been paid to date for the period to 31 December 1992. The remaining sum of $1,933 must be paid to the Official Trustee by 30 June 1993.
On 20…
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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AGLC
Re Gillies, P.A. Ex parte The Official Trustee in Bankruptcy, the Trustee of the property of Gillies, P.A. Gillies, P.A. [1993] FCA 409 ((1993) 115 ALR 631; (1993) 42 FCR 571)
Case
[1993] FCA 409
Decision Date
CaseChat Overview and Summary
Re Gillies is a decision involving the Official Trustee in Bankruptcy as the plaintiff and the bankrupt, Mr. Gillies, as the defendant. The matter before the court was whether income earned by the bankrupt after the sequestration of his estate vests in the Official Trustee. The dispute centred on the interpretation of the Bankruptcy Act 1966 and the legislative scheme for requiring contributions of income from a bankrupt.
The court was required to determine the legal framework governing the vesting of after-acquired income in a bankrupt's estate. It needed to consider whether such income vests in the Official Trustee upon sequestration and whether this aligns with the legislative intent behind requiring contributions of income from the bankrupt. The court also needed to examine the legislative history and any relevant case law to understand the continuing assumption that income does not vest in the trustee.
The court held that the legislative scheme for requiring contributions of income from a bankrupt suggests a continuing assumption that income does not vest in the trustee. The court found that the accumulated after-acquired income available for a composition proposal was not income that vests in the Official Trustee upon sequestration. Therefore, the sum of $4,000 accumulated from the bankrupt's income since 1 July 1992 could be offered to the known creditors in the form of a composition proposal. This interpretation was consistent with the legislative intent to require contributions of income from the bankrupt rather than automatically vesting after-acquired income in the trustee.
The court ordered that the sum of $4,000 accumulated from the bankrupt's income since 1 July 1992 is not after-acquired property of the bankrupt which vests in the Official Trustee. The court further ordered that this sum could be offered to the known creditors in the form of a composition proposal. The settlement and entry of these orders were governed by Rule 124 of the Bankruptcy Rules.
Orders
Orders of the court
THE COURT ORDERS THAT:
1. The sum of $4,000 accumulated from the income of the bankrupt since 1 July 1992 is not after-acquired property of the bankrupt which vests in the Official Trustee pursuant to s.58(1)(a) and
(6) of the Bankruptcy Act 1966.
2. The sum of $4,000 accumulated from his income by the bankrupt since 1 July 1992 can be offered to his known creditors in the form of a composition proposal.
Note: Settlement and entry of Orders is dealt with in Rule 124 of the Bankruptcy Rules.