Hess v Official Trustee in Bankruptcy [2015] FCA 1400

Hess v Official Trustee in Bankruptcy [2015] FCA 1400

Money bequeathed to the applicant as inheritance, which originally constituted compensation for personal injury to the applicant's stepfather, lost its exempt character under s 116(2)(g) of the Bankruptcy Act 1966 (Cth) when distributed to her as a beneficiary and became property divisible among creditors. However, the component referable to 'future funeral benefits', to the extent received by the applicant as a dependent of the deceased, remained exempt property not divisible among creditors.

Parties
Applicant: Angela Hess; Respondent: Official Trustee in Bankruptcy
Jurisdiction
Australia
Judgment Date
11 December 2015
Procedural Posture
Application for Review of Trustee's Decision / Judgment After Hearing
Outcome
Application allowed in part.
Legal Topics
Workers' Compensation, Inheritance, Property of Bankrupt, Exempt Property in Bankruptcy, Vesting of Compensation, Funeral Benefits, Trustee Powers
Bankruptcy and Insolvency Workers' Compensation Inheritance Property of Bankrupt Exempt Property in Bankruptcy Vesting of Compensation Funeral Benefits Trustee Powers

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Authorities cited 10 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Angela Hess

Applicant

Official Trustee in Bankruptcy

Respondent

Procedural Posture

Application for Review of Trustee's Decision / Judgment After Hearing

Legal Issues

  1. 1 Whether inheritance received by an undischarged bankrupt as compensation for personal injury to a family member is divisible property among creditors under s 116(1) of the Bankruptcy Act 1966 (Cth) or exempt under s 116(2)(g)
  2. 2 Whether funds received as a beneficiary, rather than as executor, change the character of the compensation regarding bankruptcy exemptions

Ratio Decidendi

Money bequeathed to the applicant as inheritance, which originally constituted compensation for personal injury to the applicant's stepfather, lost its exempt character under s 116(2)(g) of the Bankruptcy Act 1966 (Cth) when distributed to her as a beneficiary and became property divisible among creditors. However, the component referable to 'future funeral benefits', to the extent received by the applicant as a dependent of the deceased, remained exempt property not divisible among creditors.

Court Disposition

Application allowed in part.

Orders

  • The respondent pay the applicant the sum of $12,025 from the amount transferred to the respondent from Account 50439260 held by the applicant with Credit Union Australia Limited.
  • The respondent pay the applicant's costs of the proceeding.