Background
Corey Michael Wittenberg died on 25 April 2022 owing more than $500,000 to solicitors. His estate was later placed into administration under Part XI of the Bankruptcy Act 1966 (Cth), and Bruce Gleeson was appointed trustee.
From the day after Mr Wittenberg’s death until 3 May 2022, $302,000 was electronically transferred from bank accounts in his sole name to an account in the sole name of his wife, Mary Wittenberg. The transfers were described as “Money To Wife.” Mrs Wittenberg did not participate in the proceedings despite substituted service and repeated notice of the hearing.
The Court’s Holding
Justice Owens rejected the trustee’s primary claim to recover the money as a debt under s 139ZQ. That provision required proof that the money was received through a transaction void against the trustee under ss 120 or 121. Although the transfers occurred without consideration, they were made after Mr Wittenberg’s death, and there was no evidence that he or a legal representative authorised them. They therefore were not transfers “by” him for those avoidance provisions.
The Court nevertheless granted the trustee’s alternative claim under s 30. The money in Mr Wittenberg’s accounts at death was divisible property of the estate. Its earlier source included a $300,000 withdrawal from a regulated superannuation fund, but the superannuation exclusions did not apply: the payment had been received months before his death and had become ordinary bank-account funds. The Court declared the $302,000 divisible estate property and entered judgment against Mrs Wittenberg for that amount, with interest from 3 May 2022 and costs.
Key Takeaways
- A post-death unauthorised transfer from a deceased person’s account is not necessarily a voidable transfer “by” the deceased under ss 120 or 121.
- A trustee may still obtain declaratory and recovery relief where funds belonging to an administered estate were misappropriated.
- Superannuation money paid to a person before death does not retain its protected character merely because it can be traced into a bank account.
Why It Matters
The decision distinguishes statutory transaction-avoidance claims from the broader power to recover property that was already part of a deceased bankrupt estate. A technical failure to establish a void transaction did not prevent recovery of estate funds.
For insolvency practitioners, the case underscores the need to identify the timing and authority for post-death account transactions, while also considering direct relief based on the estate’s proprietary entitlement.