Gittins v Field (Trustee) [2018] FCA 976

Gittins v Field (Trustee) [2018] FCA 976

The monthly payments received by the applicant under income protection insurance policies constitute 'income' for the purposes of Division 4B of Part VI of the Bankruptcy Act 1966 (Cth), and are subject to the statutory income contribution scheme even if they are also characterised as compensation for personal injury under s 116(2)(g). The relevant provisions operate independently: the liability for contribution arises by operation of Division 4B, and neither the benefits themselves nor the obligation created by Division 4B vest in the trustee as divisible property. The statutory contribution regime must be given effect and is not limited by s 116(2)(g) in relation to 'income'.

Parties
Applicant: John James Gittins; Respondent: Malcolm Field
Jurisdiction
Australia
Judgment Date
29 June 2018
Procedural Posture
Bankruptcy Application for Declaratory Relief / Final Judgment
Outcome
Application dismissed with costs.
Legal Topics
Income Protection Policies, Personal Injury Compensation, Income Contributions, Bankrupt's Property, Divisibility of Property
Bankruptcy Insolvency Income Protection Policies Personal Injury Compensation Income Contributions Bankrupt's Property Divisibility of Property

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Parties

John James Gittins

Applicant

Malcolm Field

Respondent

Procedural Posture

Bankruptcy Application for Declaratory Relief / Final Judgment

Legal Issues

  1. 1 Whether income protection payments received by the bankrupt are 'income' for the purposes of Division 4B, Part VI of the Bankruptcy Act 1966 (Cth)
  2. 2 Whether such payments are excluded from divisible property under s 116(2)(g) of the Bankruptcy Act 1966 (Cth) as compensation for personal injury
  3. 3 Whether the trustee is entitled to claim those benefits or require a contribution calculated by reference to them

Ratio Decidendi

The monthly payments received by the applicant under income protection insurance policies constitute 'income' for the purposes of Division 4B of Part VI of the Bankruptcy Act 1966 (Cth), and are subject to the statutory income contribution scheme even if they are also characterised as compensation for personal injury under s 116(2)(g). The relevant provisions operate independently: the liability for contribution arises by operation of Division 4B, and neither the benefits themselves nor the obligation created by Division 4B vest in the trustee as divisible property. The statutory contribution regime must be given effect and is not limited by s 116(2)(g) in relation to 'income'.

Court Disposition

Application dismissed with costs.

Orders

  • The application is dismissed.