State courts have jurisdiction to determine the standing of a bankrupt party even where that determination requires applying ss 58 and 116 of the Bankruptcy Act 1966 (Cth), provided the trustee in bankruptcy is not a party claiming the property. The exclusive federal jurisdiction under s 27 is only engaged where the trustee is a party and the court's determination would necessarily affect the trustee's title. A right to sue for breach of trust is incidental to the equitable interest in trust property and, where that property was acquired with protected money (personal injury compensation), the chose in action is also protected under ss 116(2)(n) and (3) and does not vest in the trustee in bankruptcy.
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