Miles v Official Receiver in Bankruptcy [1963] HCA 24

High Court of Australia Dixon C.J. Menzies and Windeyer JJ. Miles v Official Receiver in Bankruptcy [1963] HCA 24

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment.

July 26 Dixon C.J., Menzies and Windeyer JJ.

This is an appeal from a decision of the Court of Bankruptcy which, upon an application for directions made by the trustee of the bankrupt estate of C. E. Miles deceased, ordered that a fund of £9,137 14s. 11d. held by him should go to the deceased's unsecured creditors rather than to the appellant, who was his widow and the executrix of his will.

The fund of £9,137 14s. 11d. was actually constituted by deducting from £16,500—the gross proceeds of a piece of land forming part of the bankrupt's estate, which the trustee, with the consent of the appellant, sold—the following payments:

(a) To the first mortgagee £2,007 19 8 (b) To the second mortgagee £4,640 3 7 (c) Selling expenses £ 714 1 10 £7,362 5 1

The contest between the appellant and the trustee—who in the proceedings before the Court of Bankruptcy and this Court took the part of the creditors—arose in this way. On 28th June 1957 Miles, who was the registered proprietor of land at Moorabbin, mortgaged it to The Australasian Temperance and General Mutual Life Assurance Society Ltd. (which we shall call "the Society") in consideration of a loan of £11,000. On the same day the deceased gave the Society further security for the loan by assigning to it a policy issued by it to the deceased on 12th June 1957 whereby he was insured for £10,000 payable upon attaining the age of sixty years or his death at an earlier date. This assignment was registered on 7th July 1957. On 11th August 1958 the deceased gave a second mortgage over the land to Marjorie Wilson Thomson. The deceased died on 7th October 1960 before reaching the age of sixty years and thereupon the policy moneys became payable. These have been treated as amounting to £9,981. It is common ground that, at the date of the death of the deceased, the principal moneys secured by the mortgage were due and payable because interest and premiums were in arrears. After his death the Society applied the policy moneys as follows:—