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Silvia v Thomson

Silvia v Thomson

Case [1989] FCA 394 30 June 1989

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JUDGMENT No. 3.7.k.Yj.L

CATCHWORDS

BANKRUPTCY - Beneficlary under wlll - grant of probate made after discharge from bankruptcy pursuant to S. 149 of Bankruptcy Act 1966 - whether chose in actlon to due administration of estate accrulng durlng bankruptcy constitutes after acqulred property of the bankrupt.

BRIAN RAYMOND SILVIA v GEOFFREY DAVID THOMSON

W708 of 1984

LOCKHART J.
30 JUNE 1989

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA )
1

NEW SOUTH WALES DISTRICT REGISTRY NO. W708 of 1984

GENERAL DIVISION 1

BETWEEN: BRIAN RAYMOND SILVIA
Applicant

AND : GEOFFREY DAVID THOMSON
Respondent

JUDGE MAKING ORDER: LOCKHART J.
DATE ORDER MADE: 18 JULY 1989
WHERE ORDER MADE: SYDNEY
MINUTES OF ORDER

THE COURT ORDERS:

1. A declaration that all the rrght, tltle and interest of Florence Mary Thomson, whose estate was sequestrated on 31 July 1984, to the estate of Evan Elizabeth Klrkness deceased, who died on 6 June 1986, is and is deemed to be included in the property of the discharged bankrupt

Florence Mary Thomson, and is dlvlslble amongst her creditors in her bankrupt estate;

That the costs of the applicant and of the respondent of and incidental to this application be paid out of the estate of the discharged bankrupt to the Intent that they constitute a prlorlty payment withln the meaning of para. 109(l)(a) of the Bankruptcy Act 1966, as costs, charges and expenses of the administration of the bankruptcy;

3 . That any documents t h a t have been produced i n response t o subpoenas may be returned.

NOTE: S e t t l e m e n t and e n t r y o f orders i s d e a l t w i t h i n Order

3 6 o f t h e Federal Court Rules .

IN THE FEDERAL COURT OF AUSTRALIA )
)

NEW SOUTH WALES DISTRICT REGISTRY ) NO. W708 of 1984

1

GENERAL DIVISION 1

BETWEEN : BRIAN RAYMOND SILVIA
Applicant

AND : GEOFFREY DAVID THOMSON
Respondent

30 JUNE 1989

REASONS FOR JUDGMENT

LOCKHART J.

The Court is hearing today an appllcatlon by Brlan Raymond Silvia, as trustee of the bankrupt estate of Florence Mary Thomson ("Mrs. Thomson") for a declaration that all the right title and interest of the bankrupt to the property of the late EVa Elizabeth Kirkness ("the testatrix") is and is

deemed to be included in the property of Mrs. Thomson

divisible amongst her creditors in her estate. The

sequestration order was made on 31 July 1984.

The testatrix made her last wlll and testament dated 7 August 1985 in whlch she appointed the respondent, Geoffrey David Thomson, executor and trustee. The respondent is the husband of Mrs. Thomson. The testatrix left the whole of her property to Mrs. Thomson.

The testatrix dred on 6 June 1986 which was before Mrs. Thomson was discharged from her bankruptcy by operation of S. 149 of the Bankruptcy Act 1966 ("the Act") on 1 August 1987.

It was not until 7 September…

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 Silvia v Thomson

Details

AGLC: Silvia v Thomson [1989] FCA 394
Case: [1989] FCA 394
Decision Date: 30 Jun 1989

CaseChat Overview and Summary

The case of Silvia v Thomson before Lockhart J. in the Federal Court of Australia addresses a dispute concerning the property rights of a bankrupt individual, Florence Mary Thomson, who was discharged from bankruptcy following the death of a testatrix, Evan Elizabeth Kirkness. The testatrix's will, dated 7 August 1985, left her entire estate to Mrs. Thomson, with Geoffrey David Thomson, the respondent and husband of Mrs. Thomson, appointed as executor and trustee. The testatrix passed away on 6 June 1986, prior to Mrs. Thomson's discharge from bankruptcy on 1 August 1987. Probate of the will was granted to the respondent on 7 September 1988. The central issue before the court was whether the right to the due administration of the testatrix's estate, which vested in Mrs. Thomson upon the testatrix's death, constituted "after acquired property" of Mrs. Thomson that should be divisible among her creditors.

Lockhart J. determined that the right to the due administration of the testatrix's estate, as a chose in action, indeed constituted "after acquired property" of Mrs. Thomson. This decision aligns with the ruling in Re Pevsner; Ex parte Trustee in Bankruptcy (1983) 68 FLR 254, where Sheppard J. held a similar view. The court reasoned that the right to have the estate properly administered arose at the moment of the testatrix's death and vested in the trustee of Mrs. Thomson's estate. This right, although not a proprietary interest in specific assets, was a right enforceable against the Public Trustee and later against the respondent upon the grant of probate. Consequently, this right accrued before Mrs. Thomson's discharge from bankruptcy and thus constituted property of her estate, divisible among her creditors.

The court also addressed the matter of costs, ruling that both the applicant's and respondent's costs should be paid from Mrs. Thomson's estate as priority payments under the Bankruptcy Act 1966. This decision reflected the court's view that the respondent's stance, although not unreasonable, exposed him to potential claims by Mrs. Thomson as the sole beneficiary of the testatrix's estate.

The final orders of the court included a declaration that the right, title, and interest of Mrs. Thomson to the estate of the testatrix are part of her property, divisible among her creditors. Additionally, the court ordered that the costs of the proceedings be paid from the bankrupt's estate as priority payments. Any documents produced in response to subpoenas were to be returned.

Orders