Thompson v Cyati

In the matter of Thompson v Cyati, the respondent, who is the trustee of the applicant’s bankruptcy estate, sought to stay a family provision application brought by the applicant under the Family Provision Act 1958 (Vic) on the basis that the applicant became bankrupt during the course of the application. The application was heard in the Supreme Court of Victoria. The central issue for the court was whether the family provision application was an action that was stayed pursuant to section 60 of the Bankruptcy Act 1966 (Cth). The court was required to determine if the family provision application was an action ‘in respect of a personal wrong or the death of a family member’ within the meaning of subsection 60(4) of the Bankruptcy Act.

The court found that the family provision application was not an action that was stayed by section 60 of the Bankruptcy Act. The court held that the family provision application was not an action ‘in respect of a personal wrong or the death of a family member’ as those words are ordinarily understood. The court held that the family provision application was instead an action for property or for a debt, and as such was not within the terms of subsection 60(4) of the Bankruptcy Act. The court further found that the family provision application was not an action that was brought against the bankrupt but rather was an action that was brought by the bankrupt and that the bankrupt had an interest in the property in question. The court held that the family provision application was not an action that was brought by or on behalf of the bankrupt within the meaning of section 60(2) of the Bankruptcy Act.

The court ordered that the family provision application was stayed, until the applicant was discharged from bankruptcy, by operation of section 60 of the Bankruptcy Act. The court found that the family provision application was not an action that was stayed by virtue of section 60 of the Bankruptcy Act, but that the application was nonetheless stayed because the applicant was a bankrupt and the trustee had sought to stay the application. The court found that the trustee had standing to bring the application to stay the family provision application, and that the application should be stayed until the applicant was discharged from bankruptcy.