Daemar v Industrial Commission of New South Wales

The High Court of Australia heard an application for special leave to appeal concerning the construction of section 60(2) of the *Bankruptcy Act*. The appellant, Mr Daemar, had initiated proceedings in the Supreme Court of New South Wales seeking prerogative relief against the Industrial Commission of New South Wales, alleging the Commission had acted without jurisdiction. Before these proceedings were heard, Mr Daemar was declared bankrupt.

The central legal issue before the High Court was whether the automatic stay imposed by section 60(2) of the *Bankruptcy Act* applied to Mr Daemar's claim for prerogative relief. This required the Court to determine the meaning of "action" as defined within section 60, and whether a claim for prerogative relief, particularly one seeking to establish a lack of jurisdiction, constituted an "action" subject to the stay. A secondary issue concerned the meaning of section 116 of the *Bankruptcy Act*.

The appellant argued that the Court of Appeal erred in its construction of section 60(2). While acknowledging that the claim for damages and costs within the summons would likely be stayed, the appellant contended that the claim for prerogative relief was not subject to the stay. This submission was based on the principle that section 60(2) should be construed in light of the *Bankruptcy Act*'s object of preserving the bankrupt's property divisible among creditors. A claim for prerogative relief, it was argued, was not a claim in respect of such property but rather a vindication of public law by a person with locus standi, seeking to establish the public law duty of a commission to act within its jurisdiction.