Baker v Sheridan

In *Baker v Sheridan*, the Court of Appeal of New South Wales considered a motion for the substitution of the appellant in bankruptcy proceedings. The claimant sought to be substituted as the appellant, asserting they were the assignee of the bankrupt appellant's rights in the proceedings. The core of the dispute revolved around whether the trustee's right to prosecute an appeal, particularly one concerning a claim for money or property that would ordinarily vest in the trustee, was capable of assignment.

The primary legal issue before the Court was whether the assignee could be substituted as the appellant. This required the Court to determine whether the trustee's right to pursue the appeal was an assignable chose in action. Further, the Court had to consider the implications of the trustee's conduct, specifically whether any communication regarding the assignment constituted an election to either prosecute or discontinue the appeal. The Court also had to address the issue of security for costs, given the assignee's alleged inability to provide such security and whether any special circumstances justified dispensing with this requirement.

Mason P, applying established principles of bankruptcy law, reasoned that the trustee's right to prosecute an appeal in relation to a claim for property that would vest in the trustee is not generally assignable. The Court held that the trustee has an election to either continue or abandon such an appeal. The communication of the assignment was considered tantamount to an election by the trustee, and in the absence of a clear discontinuance or abandonment of the appeal by the trustee, the assignee could not step into the trustee's shoes. Furthermore, the Court found that the assignee's inability to pay costs, without more, did not constitute special circumstances to waive the requirement for security for costs.

The Court dismissed the motion for substitution and ordered that the assignee pay the costs of the motion.