Bankrupt, Family Provision, Chose in Action, Out of Time

In PERGOLETO v CHANDLER & ORS [2021] SASC 30 the applicant is one of the children of Antonia Pergoleto (“the deceased”) who died in August 2018. A grant of probate was made in March 2019 and the entire estate was distributed in accordance with the terms of the will.

The family members have been estranged for many years with the respondents becoming aware that the applicant was an undischarged bankrupt following commencement of proceedings. Although the applicant became a bankrupt on 1 June 2015 due to his lack of cooperation with his trustee in bankruptcy, the period of bankruptcy has been extended to eight years.

Initially the applicant was legally represented, but at the time of the proceedings was self-represented.

Time in which application can be made

An application under theInheritance (Family Provision) Act 1972 (“the Act”) made more than six months after the date of the grant of probate may prove difficult in respect of an extension of time as the entire estate has been fully distributed prior to the commencement of the action. The applicant commenced proceedings out of time on 20 November 2019.

An extension of time

Where there has been a final distribution of the estate, no order for provision can be made. As the court has no power to grant an extension of time and no beneficiary who has received a distribution would be vulnerable to either a proprietary or personal claim. Therefore a claim under the Act must be dismissed.

In the alternative the applicant sought other common law remedies in the event that the statutory claim is unsuccessful claiming that he was misled by the respondents, about progress of the grant of probate and the status of the distribution of the estate. The respondents deny those claims and submit the applicant knew the position in relation to the application for a grant of probate.

The interlocutory application seeking summary dismissal was set for argument on 2 March 2021. In early February, citing health reasons the applicant requested by email that the argument be adjourned. The respondents objected; the Court refused the application with the parties being notified on 9 February 2021 that the argument would proceed on 2 March. There was no attendance by the applicant.

The effect of bankruptcy

Additionally a bankrupts property (including a chose in action) vests in the trustee in bankruptcy therefore, it could be argued that the claim of the bankrupt under the Act would vest in the trustee as soon as it is acquired by the bankrupt. Thus, the question of whether a bankrupt retains the right to bring a claim under the Act may largely be academic. As once the property of a bankrupt vests in a trustee, the bankrupt no longer has standing in legal proceedings in respect of that property.

The Court accepted the submission that only the trustee can “agitate that question” and has choosen not to do so. Therefore the applicant has no standing to proceed with the causes of action in deceit or conspiracy to defraud. The respondent is entitled to summary dismissal in relation to the causes of action in deceit or conspiracy to defraud as well.

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