Landmark Operations Ltd v J Tiver Nominees Pty Ltd (No 4)

[2010] SASC 20

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

LANDMARK OPERATIONS LTD v J TIVER NOMINEES PTY LTD & ORS (No 4)

[2010] SASC 20

Reasons for Decision of The Honourable Justice Duggan

26 February 2010

BANKRUPTCY - PROCEEDINGS IN CONNECTION WITH SEQUESTRATION - PETITION AND SEQUESTRATION ORDER - EFFECT OF BANKRUPTCY ON PROPERTY AND PROCEEDINGS - ACTIONS BY AND AGAINST BANKRUPT - ACTIONS BY OR ON BEHALF OF BANKRUPT - ACTION INSTITUTED BEFORE SEQUESTRATION - GENERALLY

Application to summarily dismiss an appeal against a decision of a Master of the Supreme Court to refuse stay of execution – notice of appeal filed on behalf of third defendant – sequestration order then made in relation to third defendant’s property –trustee in bankruptcy elected not to continue with appeal.

HELD: appeal dismissed as incompetent – the trustee deemed to have abandoned the appeal – appellant does not have locus standi to prosecute the appeal in her own name.

Bankruptcy Act 1966 (Cth) s 60, s 60(5), s 60(2), s 60(3), referred to.
Cummings & Fuller v Claremont Petroleum NL & Anor (1996) 185 CLR 124, considered.

LANDMARK OPERATIONS LTD v J TIVER NOMINEES PTY LTD & ORS (No 4)
[2010] SASC 20

Civil

1. DUGGAN J:         This is an application to summarily dismiss an appeal against a decision of a Master of the Supreme Court to refuse a stay of execution.  As the Master pointed out in his reasons for decision, this Court gave judgment against the six defendants for $10,857,200.  At the time of the judgment the first defendant was in liquidation and four personal defendants were bankrupt.  The third defendant was the applicant for the stay of the execution.  At the time of the hearing before the Master bankruptcy proceedings by the plaintiff against the third defendant were pending.

2. The application to stay the execution was dismissed on 22 October 2009.  On 5 November 2009 the third defendant filed a Notice of Appeal against the order of the Master.  On 13 November 2009 a sequestration order was made against the third defendant and her property vested in the Official Trustee.

3. On 20 November 2009 the Official Trustee was given notice of the appeal against the decision of the Master.  The Official Trustee replied to the solicitors for the plaintiff on 7 December 2009 in the following terms:

   I note that by way of a Notice of Appeal dated 5 November 2009 the bankrupt appealed Judge Lunn’s dismissal of the Stay Application (“the appeal”).

   After consideration of the information associated with the Appeal the trustee has made a decision pursuant to Section 60(3) of the Bankruptcy Act 1966, to allow the 28 day time limit lapse and accordingly, will be deemed to have abandoned the action.

   In accordance with the intimation in the letter the Official Trustee did not elect to continue with the appeal. 

4. Section 60 of the Bankruptcy Act 1966 (Cth) provides, in part, as follows:

   (2)An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.

   (3)If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.

   Section 60(5) provides that “action” means “any civil proceeding, whether at law or in equity”.

5. As set out above, the Notice of Appeal was filed before the bankruptcy of the third defendant. The institution of an appeal by a defendant against a judgment in favour of a plaintiff constitutes the commencement of an action within s 60(2) of the Act.[1] By operation of s 60(2) the appeal was stayed automatically until the trustee elected in writing to prosecute or discontinue it. The Official Trustee has given notice of intention not to continue with the appeal and, by operation of s 60(3) is deemed to have abandoned it. The third defendant does not have locus standi to prosecute the appeal in her own name. [2]

   [1]    Cummings & Fuller v Claremont Petroleum NL & Anor (1996) 185 CLR 124 at 130.

   [2]    Cummings & Fuller v Claremont Petroleum NL & Anor (1996) 185 CLR 124 at 139.

6. Accordingly, the appeal must be dismissed as incompetent.