Lyford, Maurice Hodgson v Levit, Joseph [1984] FCA 207

Lyford, Maurice Hodgson v Levit, Joseph [1984] FCA 207

The primary judge's exercise of discretion miscarried because he did not take into account the Levit Family Trust, including the respondent's capacity as a potential beneficiary and the trustee's power of advancement of capital, as a source from which the respondent's special and non-recurring legal expenses might reasonably be met. Having regard to the respondent's income, the children's trust income, and the availability of trust capital, it was reasonable to require the respondent to pay $15,000 per year, or $1,250 per month, to the trustee.

Jurisdiction
Australia
Judgment Date
19 July 1984
Procedural Posture
Appeal From the Supreme Court of Western Australia Concerning an Order Under Bankruptcy Act 1966, S.131 for Payment of Part of a Bankrupt's Income to the Trustee / Appeal to the Federal Court of Australia, General Division
Outcome
Appeal allowed; order varied to increase the monthly payment to the trustee from $833.33 to $1,250.00 with effect from the payment falling due on 26 July 1984.
Legal Topics
['income of Bankrupt' "court's Discretion to Order Payment of Income to Trustee" 'discretionary Trust' 'power of Advancement' 'legal Expenses' 'availability of Other Funds to Bankrupt']
['bankruptcy' 'trusts'] ['income of Bankrupt' "court's Discretion to Order Payment of Income to Trustee" 'discretionary Trust' 'power of Advancement' 'legal Expenses' 'availability of Other Funds to Bankrupt']

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Procedural Posture

Appeal From the Supreme Court of Western Australia Concerning an Order Under Bankruptcy Act 1966, S.131 for Payment of Part of a Bankrupt's Income to the Trustee / Appeal to the Federal Court of Australia, General Division

Legal Issues

  1. 1 ["Whether the monthly amount ordered to be paid from the bankrupt's income to the trustee was adequate under Bankruptcy Act 1966, s.131." 'Whether the Court, in exercising its discretion under Bankruptcy Act 1966, s.131, could have regard to funds not actually received by the bankrupt but potentially available through a discretionary trust or power of advancement.' "Whether the respondent's anticipated and incurred criminal legal expenses justified maintaining the existing lower contribution from income."]

Ratio Decidendi

The primary judge's exercise of discretion miscarried because he did not take into account the Levit Family Trust, including the respondent's capacity as a potential beneficiary and the trustee's power of advancement of capital, as a source from which the respondent's special and non-recurring legal expenses might reasonably be met. Having regard to the respondent's income, the children's trust income, and the availability of trust capital, it was reasonable to require the respondent to pay $15,000 per year, or $1,250 per month, to the trustee.

Court Disposition

Appeal allowed; order varied to increase the monthly payment to the trustee from $833.33 to $1,250.00 with effect from the payment falling due on 26 July 1984.

Orders

  • ['The appeal be allowed.' 'The order of Rowland J. made on 26 January 1984 be varied with effect on and from the payment falling due on 26 July 1984 by substituting the sum "$1,250.00" for the sum "$833.33".']