Ms By Her Tutor the New South Wales Trustee and Guardian v Official Trustee in Bankruptcy

[2011] FMCA 766

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MS BY HER TUTOR THE NEW SOUTH WALES TRUSTEE & GUARDIAN v OFFICIAL TRUSTEE IN BANKRUPTCY [2011] FMCA 766

BANKRUPTCY – Application for leave nunc pro tunc to take fresh steps in legal proceedings.

Bankruptcy Act 1966 (Cth), s.58

Singh v The Official Trustee in Bankruptcy (2001) 214 FLR 84; [2007] FMCA 1367
Re Veghelyi; Smith & Ors v Official Trustee in Bankruptcy (1993) 45 FCR 413; [1993] FCA 491

Applicant: MS BY HER TUTOR THE NEW SOUTH WALES TRUSTEE & GUARDIAN

Respondent: OFFICIAL TRUSTEE IN BANKRUPTCY

File Number: SYG 2103 of 2011

Judgment of: Barnes FM

Hearing date: 13 September 2011

Delivered at: Sydney

Delivered on: 13 September 2011

REPRESENTATION

Counsel for the Applicant: Ms Chambers

Solicitors for the Applicant: Slater & Gordon Lawyers

Solicitors for the Respondent: Harris Freidman

ORDERS

1. The applicant be permitted to bring these proceedings under a pseudonym.

2. To the extent that leave may be necessary, the applicant be granted leave nunc pro tunc from 23 November 2006 to take such steps as have already been taken in the Supreme Court of New South Wales proceedings no.2004/176823, including the application by consent on 25 October 2010 before Hoeben J for the making and entry of final orders.

3. The Official Trustee’s costs of the application be paid out of the bankrupt estate of Ian Rodney Pettit.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 2103 of 2011

MS BY HER TUTOR THE NEW SOUTH WALES TRUSTEE & GUARDIAN

Applicant

And

OFFICIAL TRUSTEE IN BANKRUPTCY

Respondent

REASONS FOR JUDGMENT

(Revised from Transcript)

1. This is an application filed in court seeking leave pursuant to s.58(3)(b) of the Bankruptcy Act 1966 (Cth) to take fresh steps in legal proceedings in respect of a provable debt.

2. The applicant seeks and should have leave to bring these proceedings under a pseudonym in circumstances where prior proceedings in the Supreme Court of New South Wales (proceedings no.2004/176823) (the Supreme Court proceedings) between the applicant and the bankrupt were conducted on that basis for reasons given in a judgment of Studdert J on 5 November 2004.  These are the proceedings in relation to which the leave is sought.  They related to allegations of professional misconduct against a psychiatrist, a Dr Pettit, by a patient.  The applicant is that patient.  In those proceedings and in this court she seeks to proceed by her tutor, the New South Wales Trustee and Guardian in circumstances where the Guardianship Tribunal made orders in 2008 appointing the New South Wales Trustee and Guardian as financial manager of her estate.  In this court, a tutor is a litigation guardian but I consider that it is appropriate that the terminology that was employed in the Supreme Court proceedings should be used. 

3. The respondent to the present proceedings is the Official Trustee. This is the second application for leave under s.58(3) of the Bankruptcy Act. Earlier proceedings named Dr Pettit as respondent. The view was taken that the incorrect respondent had been named and that application has been discontinued with leave. The solicitor for the Official Trustee was present today and consented to the applicant proceeding immediately on a fresh application properly naming the Official Trustee as the respondent.

4. The Official Trustee supports the orders that are sought by the applicant.  The need for these orders arises in circumstances where in 2004 the applicant commenced the Supreme Court proceedings against the bankrupt, Dr Pettit, alleging professional negligence, breach of contract, assault and trespass to the person.  Relevantly, Dr Pettit was made bankrupt on his own petition on or about 23 November 2006.

5. The applicant lodged a proof of debt with the Official Trustee in Bankruptcy (as the trustee of Dr Pettit’s bankrupt estate) on or about 14 September 2007.  The Official Trustee admitted the proof of debt on or about 17 June 2011. 

6. In the meantime, on or about 12 May 2010, the applicant and the bankrupt agreed to settle the Supreme Court proceedings.  I am told from the bar table that when the matter was before the Supreme Court it was not drawn to the attention of Hoeben J, the presiding judge, that the defendant to those proceedings had in fact become bankrupt on a debtor’s petition.  Orders were made by Hoeben J on 25 October 2010 by consent, including, among other things, judgment for the plaintiff against the defendant in a sum of over $105,000 plus costs. 

7. The matter has come to this court because by letter of 11 November 2010 the solicitors for the Official Trustee advised the solicitor for the applicant that the Official Trustee did not intend to release the judgment sum to the New South Wales Trustee and Guardian until leave was granted to the applicant pursuant to s.58(3) of the Bankruptcy Act in respect of the judgment and orders of Hoeben J. The letter indicated that the Official Trustee would “consent to such an application provided it is limited to, in effect, affirming the orders made by [Hoeben J]”. 

8. At that time, it appeared that there may have been an issue about whether there would be a need to seek a variation of the orders made by Hoeben J.  I am told today by the solicitors for both parties that is no longer thought necessary.  The leave that it sought is leave nunc pro tunc to take such steps as have already been taken in the Supreme Court proceedings, including the application by consent on 25 October 2010 for the making and entry of final orders.  The Official Trustee also seeks that his costs of the application be paid out of the bankrupt estate of Dr Pettit. 

9. As submitted for the applicant, there is authority that the court has power to grant an order under s.58(3)(b) of the Bankruptcy Act nunc pro tunc giving leave to continue or resolve an action where the proceedings are already under way or where it was not previously appreciated that the proceedings were in respect of a provable debt.  

   
   

   It is not entirely clear that the latter is the situation here as a proof of debt was lodged on or about 14 September 2007.  However it was not admitted until after the time of the judgment. 

10. In any event, a broad view of the power of this court to make such an order nunc pro tunc was taken by Lucev FM in Singh v The Official Trustee in Bankruptcy (2001) 214 FLR 84; [2007] FMCA 1367. His Honour made such an order in circumstances where the proceeding in question had been commenced with knowledge of the bankruptcy.

    
    

    In this case the proceeding was already on foot at the time of the bankruptcy but the further steps were taken in circumstances where it can be inferred that Dr Pettit must have known that he had been made bankrupt on his own debtor’s petition.

11. It is, however, relevant in such cases to have regard to the usual discretionary considerations concerning the complexity and stage of progress of the proceedings.  In this case it is clear that the matter before the Supreme Court would be more appropriately resolved by the Supreme Court having regard not only to any complexity of that matter but more particularly to the stage of the proceedings that had been reached.  The leave is sought only in relation to orders that have been made by consent between the applicant and the bankrupt to finalise those proceedings.  I am satisfied that it is within the court’s power in these circumstances to make an order nunc pro tunc and that it is appropriate to grant leave having regard to the fact that the Official Trustee has raised the need for such approval and suggested that there would be an obstacle to releasing the funds from the bankrupt estate to the applicant in the absence of an order, in effect, regularising what occurred in the Supreme Court.  (See generally Re Veghelyi; Smith & Ors v Official Trustee in Bankruptcy (1993) 45 FCR 413; [1993] FCA 491 at [19] – [20] per Sweeney J).

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate: 

Date:  5 October 2011