Davey v Dessco Pty Ltd and Anor (Bankruptcy)

Davey, an undischarged bankrupt, appealed a Magistrates’ Court decision which dismissed his claim against Dessco Pty Ltd and another defendant for personal income earned during his bankruptcy. The court had to determine whether an undischarged bankrupt could sue in their own name for personal income derived during the course of the bankruptcy. The case hinged on the interpretation of sections 5, 58, 60 and 166 of the Bankruptcy Act 1966 (Cth), and section 109 of the Magistrates’ Court Act 1989 (Vic).

The Court found that an undischarged bankrupt does have the capacity to sue in their own name for personal income earned during their bankruptcy. The Court held that the Magistrates’ Court had erred in its interpretation of the relevant legislation. The Court held that the Bankruptcy Act does not prohibit an undischarged bankrupt from suing in their own name for personal income earned during the course of the bankruptcy, and that the Magistrates’ Court did not have the jurisdiction to dismiss the claim on that basis. The Court also held that the Magistrates’ Court Act does not empower the Court to dismiss a claim on the basis that the plaintiff is an undischarged bankrupt.

The Court set aside the Magistrate’s order dismissing the claim and remitted the matter to the Magistrates’ Court for further proceedings. The Court found that the Magistrates’ Court had erred in its interpretation of the relevant legislation, and that the claim should not have been dismissed on the basis that the plaintiff was an undischarged bankrupt. The Court held that the plaintiff had the capacity to sue in their own name for personal income earned during the course of the bankruptcy, and that the claim should be determined on its merits. The Court held that the Magistrates’ Court did not have the jurisdiction to dismiss the claim on the basis that the plaintiff was an undischarged bankrupt.