DEFENDANTS, Action-Frinolous and vexatious-Stay of action-Inherent jurisdiction of Court. Bankruptcy-Action by bankrupt prior to bankruptcy for personal injury or wrong
done to himself*~-Bankruptcy Act 1924-1933 (No. 37 of 1924-No. 66 of 1933), sec. 63 (3).
The inherent jurisdiction of the High Court to stay an action as vexatious is to be exercised only when the action is clearly without foundation and when to allow it to proceed would impose a hardship upon the defendants which may be avoided without risk of injustice to the plaintiff. In exercising its power to stay an action on the ground that it is frivolous and vexatious the Court is not concluded by the manner in which the litigant formulates his case in his pleadings. Such power may be exercised not only where the facts are undisputed, but also in cases where there is a dispute as to the facts.
The test whether, under sec. 63 (3) of the Bankruptcy Act 1924-1933, a bankrupt may continue in his own name and for his own benefit an action commenced by him previous to his bankruptcy for a personal injury or wrong done to himself is whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, [No. 2].
body or character and without reference to his rights of property.
Wilson v. United Counties Bank Ltd., (1920) A.C. 102, at pp. 111 and 128-133, applied. SUMMONSES.
In an action in the High Court brought by Benjamin John Cox against Herbert Fogelstrom Journeaux, Horace Frank Richardson, Thomas Allan McKay and Arthur Vesey Walker for conspiracy to injure him in the minds of the business community and the public generally, the defendants took out summonses seeking orders that the action be dismissed or struck out or that all further proceedings therein be stayed on the grounds :-
1. That the estate of the plaintiff having since the commencement of the action been sequestrated under the Federal Bankruptcy Act 1924-1934 and the action not being one for personal injury or wrong done to the plaintiff or to any member of his family, the action had been abandoned or should be deemed to have been abandoned by the trustee in such bankruptcy.
2. That there was no reasonable or probable cause of action or suit disclosed by the statement of claim.
3. That the action, in SO far as it had not been abandoned, was frivolous, vexatious and oppressive and an abuse of the process of the Court.
The summonses were heard by Dixon J., from whose judgment the following facts have been abstracted :-
The action, which was based on conspiracy, was commenced on 29th November 1933. The original jurisdiction of the Court was invoked by the plaintiff upon the ground that he had become a resident of Queensland, while the six defendants were residents of Victoria. Two of the defendants, however, were incorporated…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Cox v Journeaux (No 2) [1935] HCA 48
Case
[1935] HCA 48
Decision Date
CaseChat Overview and Summary
In this matter before the High Court of Australia, Benjamin John Cox, the plaintiff, brought an action against Herbert Fogelstrom Journeaux, Horace Frank Richardson, Thomas Allan McKay, and Arthur Vesey Walker, the defendants, alleging conspiracy to injure him in the minds of the business community and the public. The defendants sought to have the action dismissed, struck out, or stayed on the grounds that the plaintiff's estate had been sequestrated under the Bankruptcy Act, that the action was not one for personal injury, that there was no reasonable cause of action, and that the proceedings were frivolous, vexatious, and an abuse of process.
The legal issues before the Court were whether the action should be stayed as frivolous and vexatious, and whether, pursuant to section 63(3) of the Bankruptcy Act 1924-1933, the bankrupt plaintiff could continue the action in his own name for his own benefit. This latter issue hinged on whether the damages sought were to be estimated by reference to pain felt in respect of the bankrupt's mind, body, or character, rather than his rights of property.
Dixon J. reasoned that the inherent jurisdiction to stay an action as vexatious should be exercised only when the action is clearly without foundation and its continuation would impose undue hardship on the defendants without injustice to the plaintiff. While not concluding the court, the pleadings were not determinative of the case. The Court found that the plaintiff's case was clearly hopeless, with no discernible cause of action established by the facts. The alleged conspiracy lacked evidence of a primary motive to injure, and the alleged fraudulent representations and illegal acts were not sufficiently substantiated or were based on misinterpretations of events. Furthermore, the plaintiff, having been declared bankrupt, had not received notice from the trustee to prosecute the action, and the nature of the claim did not fall within the exception for personal injury or wrong done to the bankrupt.
Consequently, the Court ordered that the action be stayed permanently, and the plaintiff was ordered to pay the defendants' costs of the action, including the costs of the summonses.