JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: BERRYMAN -v- ZURICH AUSTRALIA LTD [2016] WASC 196
CORAM: TOTTLE J
HEARD: 18 FEBRUARY 2016
DELIVERED : 1 JULY 2016
FILE NO/S: CIV 2217 of 2014
BETWEEN: BRUCE ALAN BERRYMAN
Plaintiff
AND
ZURICH AUSTRALIA LTD
Defendant
Catchwords:
Bankruptcy - Bankruptcy Act 1966 (Cth) s 60(4) and s 116(2)(g) - Where insurer had agreed to pay fixed sum benefit if plaintiff suffered total and permanent disability - Where plaintiff suffered personal injury and commenced action to recover benefit - Where plaintiff subsequently became bankrupt - Whether action automatically stayed pursuant to s 60 of the Bankruptcy Act - Whether right of action vested in trustee pursuant to s 58 and s 116 of the Bankruptcy Act - Whether action was 'in respect of a personal injury or wrong done to the bankrupt' within the meaning of s 60(4) and s 116(2)(g) - Whether action to recover benefit for personal injury under insurance policy vests in trustee or remains with bankrupt
Legislation:
Acts Interpretation Act 1901 (Cth)
Bankruptcy Act 1924 (Cth)
Bankruptcy Act 1966 (Cth)
Insolvency Act 1915 (Vic)
Insurance Contracts Act 1984 (Cth)
Life Insurance Act 1995 (Cth)
Result:
Preliminary question 1 is answered 'yes'
Preliminary question 2 does not arise
Category: A
Representation:
Counsel:
Plaintiff: Mr M D Howard SC & Mr W Zappia
Defendant: Mr G D Cobby
Solicitors:
Plaintiff: Shine Lawyers
Defendant: Turks Legal
Case(s) referred to in judgment(s):
Moss v Eaglestone [2011] NSWCA 404
Sands v State of South Australia [2015] SASCFC 36
Beckham v Drake (1849) 2 HLC 579; 9 ER 1213
Bride v Peat Marwick Mitchell [1989] WAR 383
Bryant v Commonwealth Bank of Australia (1997) 75 FCR 545
Cox v Journeaux (No 2) (1935) 52 CLR 713
Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45
Deputy Commissioner of Taxation v Dick [2007] NSWCA 190; (2007) 242 ALR 152
Duckworth v Water Corporation [2012] WASC 30
Farrah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Faulkner v Bluett (1981) 52 FLR 115
Fletcher v Westpac [2012] WASCA 154
Millane v Shire of Heidelberg [1936] VLR 8
O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356
Re Nguyen; Ex parte Official Trustee in Bankruptcy (1992) 35 FCR 320
Rogers v Spence (1846) 12 Cl & F 700; 8 ER 1586
Sheehan v Brett-Young (No 3) [2016] VSC 39
State Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412
Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45
Table of Contents
Introduction
The facts
The statutory framework
The parties' submissions
Zurich's submissions
Mr Berryman's submissions
The authorities
Disposition
The meaning of 'in respect of' and 'for' in s 60(4) and s 116(2)(g) of the Act
Purpose of s 116(2)(g) and s 60(4)
Is Mr Berryman's action in respect of a property right and not a personal injury?
Is it…
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- Case
- [2016] WASC 196
- Decision Date
CaseChat Overview and Summary
The court found that the right of action did not vest in the trustee and that the action was not automatically stayed. The court held that the statutory purpose of reserving to the bankrupt the solace for personal injury required that the benefit be retained by the bankrupt and not divisible amongst the creditors. The court rejected Zurich's argument that the action only fell within section 60(4) if the personal injury was done to the bankrupt by a third party. The court found that the provisions could be interpreted as being concerned with a 'personal injury to the bankrupt' or a 'wrong done to the bankrupt' as opposed to a 'personal injury done to the bankrupt' or a 'wrong done to the bankrupt'. The court held that there was no policy reason why the provisions should only apply to rights to damages or compensation, or actions in respect of damages or compensation, for personal injuries if the personal injuries are done to a bankrupt by a third party as opposed to being occasioned by an accident with no third party involvement.
The court's interpretation of the provisions was consistent with the statutory purpose of reserving to the bankrupt the solace for personal injury. The court found that there was no grammatical or syntactical reason why the provisions could not be interpreted as being concerned with a 'personal injury to the bankrupt' or a 'wrong done to the bankrupt' as opposed to a 'personal injury done to the bankrupt' or a 'wrong done to the bankrupt'. The court's interpretation of the provisions was also consistent with the statutory purpose of reserving to the bankrupt the solace for personal injury. The court held that the benefit should be retained by the bankrupt and not divisible amongst the creditors.
The court ordered that the bankrupt's right of action to recover the insurance benefit did not vest in the trustee and that the action was not automatically stayed under section 60 of the Bankruptcy Act. The court also ordered that the benefit should be retained by the bankrupt and not divisible amongst the creditors.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Zurich supported its submissions by reliance on the decision of Edelman J in Duckworth v Water Corporation [2012] WASC 30. In that case Edelman J was required to consider a submission to the effect that a bankrupt's claim for damages for unconscionable conduct was a claim for a 'wrong done to the bankrupt' within the meaning of s 60(4). In the course of rejecting this submission his Honour stated:In Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 at 55, Kirby P said that it 'is understandable that a person unversed in the principles of statutory construction and unaware of legal authority on the meaning of s 60(4)(a) of the [Bankruptcy] Act should have taken [these words] ... in isolation'. The phrase "personal injury or wrong" has a long history of interpretation. The words are a paregmenon. 'Wrong' and 'personal injury' have the same connotation and derivation. [85] Edelman J went on to refer to Cox v Journeaux, Faulkner v Bluett and Bryant v Commonwealth Bank of Australia to explain how s 60(4) had been construed. In doing so His Honour was not considering the question raised by Zurich's submission, namely whether s 60(4) should be construed as only applying to actions brought in respect of personal injuries if they were injuries 'done to the bankrupt'. I do not accept Zurich's submission that an action only falls within s 60(4) if the personal injury was done to the bankrupt by a third party. My reasons are as follows. First, a purposive approach to the interpretation of a statute may require the word 'or' to be interpreted disjunctively or conjunctively: Acts Interpretation Act 1901 (Cth) s 15AA, Pearce and Geddes, Statutory Interpretation in Australia (8th ed, 2014) at [2.29]-[2.30]. Secondly, it is possible to read the 'or' between 'personal injury' and 'wrong done' in both s 116(2)(g)(i) and s 60(4) disjunctively without straining the language of the sections. There are no grammatical or syntactical reasons why these sections cannot be interpreted as being concerned with a 'personal injury to the bankrupt' or a 'wrong done to the bankrupt' as opposed to a 'personal injury done to the bankrupt' or a 'wrong done to the bankrupt'. Thirdly, there is no policy reason why s 116(2)(g) and s 60(4) should only apply to rights to damages or compensation, or actions in respect of damages or compensation, for personal injuries if the personal injuries are done to a bankrupt by a third party as opposed to being occasioned by an accident with no third party involvement. Fourthly, interpreting the provisions as only applying to personal injuries done to the bankrupt by a third party is inconsistent with the statutory purpose of reserving to the bankrupt the solace for personal injury. As I have noted, Cork v Rawlins is the only decision that either counsel or I have been able to find in which a court has considered whether benefits payable under an insurance policy as a result of permanent disablement caused by an accident are divisible amongst a bankrupt insured's creditors or whether those benefits may be retained by the bankrupt.