O'Sullivan v Central Sydney Area Health Service - [2005] FMCA 968

FEDERAL MAGISTRATES COURT OF AUSTRALIA

O'SULLIVAN v CENTRAL SYDNEY AREA HEALTH SERVICE & ANOR

[2005] FMCA 968

BANKRUPTCY – Effect of bankruptcy on action commenced by bankrupt – claim for relief under State anti-discrimination legislation – whether stayed in whole or part – declaratory orders sought from bankruptcy court – application premature – more appropriate for issues to be decided in forum where action was commenced – application dismissed.

Bankruptcy Act 1966 (Cth), ss.27, 30, 31(b), 58, 60(2), 60(3), 60(4), 60(5), 116(1), 116(2), 116(2)(g),178
Anti-discrimination Act 1977 (NSW), ss.108, 108(2), 108(2)(a)

Robyn Smith v Chevelle Developments Pty Ltd t/as Snowden Parkes Real Estate Agents and Another [2005] NSWIR Comm 109
Bullock v Goodluck & Transport Commission (1983) 48 ALR 217
Faulkner v Bluett (1981) 52 FLR 115
Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421
Scott v Bagshaw (2000) 99 FCR 573
Re Dingle; Westpac Banking Corporation v Worrell (1993) 47 FCR 478
Forshaw v Thompson (1992) 35 FCR 329
Daemar v Industrial Commisison of NSW (1988) 12 NSWLR 45
Cummings v Claremont Petroleum NL (1996) 185 CLR 124
Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438
Ibeneweka v Egbuna [1964] 1 WLR 291

Applicant:

BRENDAN O'SULLIVAN

First Respondent:

CENTRAL SYDNEY AREA HEALTH SERVICE

Second Respondent:

THE OFFICIAL TRUSTEE IN BANKRUPTCY

File Number:

SYG 1439 of 2005

Judgment of:

Smith FM

Hearing date:

08 July 2005

Delivered at:

Sydney

Delivered on:

08 July 2005

REPRESENTATION

Counsel for the Applicant:

Mr C Murtough

Solicitors for the Applicant:

DPN Company

Counsel for the Respondent:

Mr A Moses

Solicitors for the First Respondent:

Bolzan & Dimitri

Solicitors for the Second Respondent

Lobban McNally

ORDERS

Application dismissed.
Costs reserved.
Direct any application for costs by the first respondent be made in writing within 14 days of receipt of the revised judgment.
Direct that the applicant's response thereto be made in writing within 28 days of receipt of such an application.
Direct any response by the first respondent be made within 14 days thereafter.
Leave to apply on the question of costs only.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 1439 of 2005

BRENDAN O'SULLIVAN

Applicant

And

CENTRAL SYDNEY AREA HEALTH SERVICE & THE OFFICIAL TRUSTEE IN BANKRUPTCY

Respondents

REASONS FOR JUDGMENT

(revised from transcript)

This is an application seeking to invoke this Court's bankruptcy jurisdiction conferred by s.27 of the Bankruptcy Act 1966 (Cth) (“the Act”). It is brought by a bankrupt person who seeks declaratory orders under s.30 of the Act, which he believes will assist him in current proceedings in the New South Wales Administrative Decisions Tribunal in its Equal Opportunity Division (“the ADT”), by confirming his legal competence to continue those proceedings in relation to all or part of the relief he seeks.
The ADT proceedings have been on foot for several years. There have already been protracted hearings, and further hearings are envisaged later this year, as well as possible further interlocutory applications by both parties in the near future.
The applicant sought expedition in the current application in this Court, and this was granted under orders made by Raphael FM on 7 June 2005. The matter was listed today for a half-day argument, and I am indebted to counsel for both sides for assisting the Court to achieve that time goal. With the assistance of their submissions I have formed a conclusion in the matter and, given the urgency in the case, I shall give my reasons now without reserving to write a polished judgment.
There is not clear evidence before me as to the bankrupt status of the applicant, but it appears to be common ground. In his affidavit sworn on 1 June 2005, the applicant states that he was made bankrupt on 22 April 2003 by order number 1923 of 2003/9. It appears that he has not been discharged, and that the trustee of his bankrupt estate is the Official Trustee in Bankruptcy, who has been joined as the second respondent. The Official Trustee has filed an appearance which submits to any orders other than for costs.
The first respondent is a body which is an active respondent in the ADT proceedings, and I shall refer to it from here on as: "the respondent".
The Court's power under s.30 is conferred in the following terms:
30 (1) The Court:
(a) has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and
(b) may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
It is not clear to me how the applicant could contend that there is at present a “matter under Part IX, X or XI coming within the cognisance of the Court” in which declaratory orders could be made. His claims might seek to rely upon “a case of bankruptcy” in which declaratory relief would appropriately be given. However, I have not received submissions from the applicant’s counsel on the Court's jurisdiction, and neither counsel has referred me to the meaning of the term "any case of bankruptcy" in this provision.
Counsel for the respondent made submissions challenging the Court's jurisdiction to give the relief sought by the applicant, on the basis that there are no proper proceedings within which the s.30 power could be exercised. He cited Forshaw v Thompson (1992) 35 FCR 329, Re Dingle; Westpac Banking Corporation v Worrell (1993) 47 FCR 478, and Scott v Bagshaw (2000) 99 FCR 573. There is at least one reported case where bankruptcy jurisdiction was invoked on a similar basis as the present: Faulkner v Bluett (1981) 52 FLR 115, but Lockhardt J did not discuss questions of jurisdiction and discretion in that case, and it would seem that no points were taken about these matters.
I am inclined to consider that the court does have jurisdiction to make declaratory orders which determine disputes as to the effect of s.60 of the Act upon current proceedings being conducted by a bankrupt in another forum. However, it has not been necessary for me to explore this issue with my own researches and to reach a firm conclusion.
On any view of the jurisdiction, it must be discretionary, and a precondition to its exercise is also identified in the terms of s.30(1)(b) itself. In the present case I have not been persuaded that this court should exercise a discretion to give the relief sought, nor that such relief is “necessary for the purposes of carrying out or giving effect to this Act in any such case or matter”. In particular, I do not consider that giving the relief is either appropriate or necessary to assist the administration of the bankrupt estate of the applicant. In so far as it might assist the parties currently litigating before the ADT to have rulings as to the effect of the Bankruptcy Act, I consider that such rulings are more appropriately given by the ADT. I shall explain my reasons for these conclusions.
The issue which concerns the applicant is the effect of his 2003 bankruptcy on proceedings which he had commenced before that date under the Anti-Discrimination Act 1977 (NSW).
The Bankruptcy Act in s.58 provides that the effect of his bankruptcy was that “the property of the bankrupt” vested forthwith in the Official Trustee, and that after-acquired property vested (and will vest) in the Official Trustee as soon as it was (or will be) acquired or devolved on the bankrupt. The effect of that vesting is that the applicant lost all rights which he previously had in relation to property vesting in the Official Receiver, and he accordingly no longer had an appropriate interest in pursuing litigation to recover or defend his property rights. “Property” is defined in s.5 to meant “real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property.”
Property of the bankrupt which vests under s.58 becomes divisible among creditors in accordance with the provisions of s.116(1). However, s.116(2) excludes from the property divisible among creditors various identified types of property, including in paragraph s.116(2)(g):
(g) any right of the bankrupt to recover damages or compensation:
(i) for personal injury or wrong done to the bankrupt, the spouse of the bankrupt or a member of the family of the bankrupt; or
(ii) in respect of the death of the spouse of the bankrupt or a member of the family of the bankrupt;
and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person;
The scheme of the Act is that a bankrupt person does not lose his interest in rights to recover damages or compensation of the sort identified in s.116(2)(g), and that he may continue proceedings to recover damages or compensation of the defined sort already on foot at the time of bankruptcy. He also retains an interest sufficient to allow him after becoming bankrupt to commence proceedings to recover damages or compensation of the defined sort.
His lack of competence to continue most litigation, and the exception to this, are made clear in s.60(2), (3), (4) and (5):
60(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.
(4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of:
(a) any personal injury or wrong done to the bankrupt, his or her spouse or a member of his or her family; or
(b) the death of his or her spouse or of a member of his or her family.
(4A) …
(5) In this section, action means any civil proceeding, whether at law or in equity
It is clear, in my view, that the Act intends these provisions to operate according to their terms in all jurisdictions in which the Bankruptcy Act is law. This includes all Courts and Tribunals subject to the Commonwealth legislation, and includes the ADT. If a proceeding falls within s.60(2), then the statutory stay is automatic, and does not depend upon an exercise of discretion, either by a court of Bankruptcy or by the body in which the action was commenced.
Similarly, if s.60(4) applies to the whole or part of an action, then in its own terms the action may be continued by the bankrupt, and there is no opportunity or reason for leave to continue to be sought from a Court of Bankruptcy or from the body in which the proceedings were commenced.
I therefore consider that prayer 6 in the present application, which seeks the leave of this Court for the applicant to proceed with his action against the respondent in the ADT, is misconceived. Counsel for the applicant could take me to no provision of the Bankruptcy Act or relevant authority, which suggested that this Court has a discretion to grant leave for a bankrupt to continue proceedings already commenced, whether on the basis that they did or did not concern property coming within s.116(2)(g).
I also reject the contention of the counsel for the applicant that a judicial body in which a pending proceeding was commenced, does not have jurisdiction to rule upon whether the action has become incompetent, either in whole or part, by reason of a litigant's bankruptcy and thereby to rule upon the effects of s.60(2) and (4).
Plainly, in my view, the Act intends and allows such an issue to be able to be determined by the forum in which the proceeding was commenced, and there are numerous authorities where this has been litigated. I was referred to examples of this in Robyn Smith v Chevelle Developments Pty Ltd t/as Snowden Parkes Real Estate Agents and Another [2005] NSWIRComm 109; Bullock v Goodluck & Transport Commission (1983) 48 ALR 217; and Daemar v Industrial Commisison of NSW (1988) 12 NSWLR 45.
Neither counsel took me to any authority which has addressed whether a court with jurisdiction under s.27 of the Bankruptcy Act has concurrent jurisdiction to determine such issues. As I have noted above, Lockhart J exercised bankruptcy jurisdiction in Faulkner v Bluett (1981) 52 FLR 115 when declining to make declarations that a bankrupt person could continue an action in the original jurisdiction of the High Court, but his Honour's judgment contains no discussion of his jurisdiction, nor of the appropriateness of it being exercised. I note that, although his Honour found that the High Court action was stayed by s.60(2), he did not make a declaratory order to this effect.
The circumstances in which the present applicant seeks to invoke a jurisdiction for this Court to declare his entitlement to proceed with his ADT proceedings appear from two affidavits and some correspondence tendered by the applicant.
In his affidavit, the applicant says that in June 2000 his employment with the Central Sydney Area Health Service was terminated in circumstances which involved a contravention of the Anti-Discrimination Act. The circumstances included his entering into an agreement which, he says, caused him to forego long service leave and holiday pay entitlements and to resign ongoing employment. He is contending in the ADT that the making of the agreement was affected by the contraventions of the Anti-Discrimination Act which he seeks to make out. It is not necessary for me to attempt to describe his factual contentions further, and the evidence before me about his claims is manifestly far less than would currently be before the ADT.
In his affidavit, the applicant says that he made his original complaint to the ADT on 17 September 2002. Other evidence raises doubt about the exact date and manner of the initiation of the proceedings in the Tribunal, but it does appear to have been around that time. As I have indicated, his bankruptcy occurred subsequently in April 2003.
The proceedings in the Tribunal appear to have followed a considerable degree of informality, and the evidence before me leaves obscure what directions have been given by the Tribunal to obtain proper particularisation of the applicant’s claims: both as to liability and relief. In evidence before me is a document headed: "Points of claim" which is unsigned and bears no mark indicating whether or not it has ever been filed in the ADT. However, both counsel addressed me on the basis that it represents the best pleading of the applicant’s current complaint before the Tribunal. It is dated 3 May 2004, and recites events concerning the applicant's claimed disability, his employment and his loss thereof, and makes allegations that various aspects of the respondent's conduct in relation to the applicant’s employment constituted unlawful discrimination.
The “points of claim” makes allegations that the respondent has denied and is denying the applicant benefits of his employment, and it contains implicit allegations that the respondent may be responsible for other losses and damage. However, the document itself does not formulate the relief which is sought from the ADT under s.108 of the Anti-Discrimination Act 1977 (NSW), and does not contain particulars of the exact terms of the orders sought from the Tribunal nor of the heads of loss or damage under which compensation might be sought to be awarded.
Counsel for the applicant, in his submissions to me today, presented a document headed: “Relief sought by the applicant/complainant in the Administrative Decisions Tribunal”, and informed me that this document listed heads of relief which the applicant was contemplating including within an amended points of claim document which he might in the future file in the ADT pursuant to a direction of that tribunal. No evidence verifying this intention was given by the applicant, and it was obscure when it was intended to incorporate it into a “pleading” type document which would be filed in the ADT. The document states:
The Applicant/Complainant seeks the following relief pursuant to Sections 108 and 110 of the Anti Discrimination Act 1977.
1.Damages in the Sum of $40,000 for loss or damage suffered by the Claimant in consequence of the Respondent’s unlawful conduct pursuant to Section 108(2)(a) of the Anti Discrimination Act 1977.
2.An order enjoining the Respondent from continuing or repeating any conduct rendered unlawful by the Anti Discrimination Act 1977 or the Regulations pursuant to Section 108(2)(b) of the Anti Discrimination Act 1977.
3.An order that the Respondent performs any reasonable act or course of conduct to redress any loss or damage suffered by the complainant pursuant to Section 108(2)(c) of the Anti Discrimination Act 1977.
4.An order the respondent to publish an apology or retraction (or both) in respect of the subject of the complaint and, as part of the order, give directions concerning the time, form, extent and manner of publication of the apology or retraction (or both) pursuant to Section 108(2)(d) of the Anti Discrimination Act 1977.
5.An order that the Respondent develop and implement a program or policy aimed at eliminating unlawful discrimination pursuant to Section 108(2)(e) of the Anti Discrimination Act 1977.
6.An order declaring void ab initio the contract or agreement made on or about 7 June 2000 under which the Complainant’s employment with the Respondent was terminated pursuant to Section 108(2)(f) of the Anti Discrimination Act 1977.
7.An order that the Respondent pay the costs of the Complaint pursuant to section 110(2) of the Anti Discrimination Act 1977.
The relief available under the Anti-discrimination Act is conferred in

s.108, and in particular in s.108(2):
(2) If the Tribunal finds the complaint substantiated in whole or in part, it may do any one or more of the following:
(a) except in respect of a matter referred to the Tribunal under section 95 (2), order the respondent to pay the complainant damages not exceeding $40,000 by way of compensation for any loss or damage suffered by reason of the respondent’s conduct,
(b) make an order enjoining the respondent from continuing or repeating any conduct rendered unlawful by this Act or the regulations,
(c) except in respect of a representative complaint or a matter referred to the Tribunal under section 95 (2), order the respondent to perform any reasonable act or course of conduct to redress any loss or damage suffered by the complainant,
(d) order the respondent to publish an apology or a retraction (or both) in respect of the matter the subject of the complaint and, as part of the order, give directions concerning the time, form, extent and manner of publication of the apology or retraction (or both),
(e) in respect of a vilification complaint, order the respondent to develop and implement a program or policy aimed at eliminating unlawful discrimination,
(f) make an order declaring void in whole or in part and either ab initio or from such time as is specified in the order any contract or agreement made in contravention of this Act or the regulations,
(g) decline to take any further action in the matter.
There is at present before me no evidence indicating any formulation by the applicant, which has been presented by the Tribunal or to the respondent, indicating the heads of damage for which compensation is sought under s.108(2)(a). There is no evidence as to the particulars of the orders that might be sought under the general claims 2 and 3, and there is no evidence before me allowing me to assess the possible nature or effects of an order of the type foreshadowed in paragraph 6 of the document passed up by the applicant's counsel.

It is unclear to me whether there is evidence currently before the ADT that would allow it to relevantly characterise the relief which is being sought in the proceedings before it.
It seems that after the applicant became bankrupt, correspondence passed between counsel for the applicant and an officer in ITSA acting on behalf of the Official Trustee. In a letter dated 3 November 2004, counsel for the applicant referred to the applicant having “proceedings against his former employer … in relation to discrimination and employment issues” which were listed for hearing for three days starting on 9 November, and requested urgent advice on:
whether in view of his bankruptcy doctor O'Sullivan is competent to pursue these proceedings and whether and if so what leave is required from the Insolvency and Trustee Service of Australia.
He also sought advice on whether it was necessary for the bankruptcy to be disclosed to the Tribunal and the representatives of the other parties.
A response dated 8 November 2004 is the “written advice” referred to in the third declaration sought by the applicant in the present application, and which is set out below. The ITSA letter said:
BANKRUPT ESTATE OF DR BRENDAN O’SULLIVAN – NSW 1923/3/9 G10
I refer to your letter dated 3 November 2004 and note the contents.
I advise pursuant to Section 116(2)(g) of the Bankruptcy Act 1966 the bankrupt is entitled to pursue his former employer Central Sydney Area Health Service in relation to discrimination and employment issues.
Any payout for damages or compensation recovered by the bankrupt in respect of an injury or wrong done to the bankrupt is protected pursuant to the abovementioned section and therefore do not vest with the trustee.
However, money relating to unpaid long service leave and/or annual leave is considered as income and therefore will need to be included in the bankrupt’s relevant contribution assessment period.
Accordingly the bankrupt does not have to disclose to The Court/Tribunal or any other legal representative that he is an undischarged bankrupt.
Please forward to the trustee a copy of any application/s made to the Court by the bankrupt.
Should you have any queries, contact Peter Dwyer on (02) 8233 7807
According to recent correspondence from the solicitors for the Official Trustee, no response was received to the request made at the end of that letter seeking more information about the applicant’s proceeding.
On the evidence before me, this 2004 correspondence was not shown to the ADT nor to the representatives of the respondent in the ADT. The respondent became aware of the applicant’s bankruptcy in relatively recent times. This led to a letter dated 13 May 2005, in which the solicitors for the respondent wrote to counsel for the applicant. They said:
We have now been made aware that Dr O'Sullivan is an undischarged bankrupt. Please advise when you became aware that your client is an undischarged bankrupt.
Furthermore, in view of sections 58 and 116(1) of the Bankruptcy Act 1996 (Cth), please advise whether or not Dr O'Sullivan intends to continue these proceedings. If Dr O'Sullivan does not intend to discontinue, we require an explanation.
We request a response by 4 pm on Tuesday, 17 May 2005.
We advise that until this issue is resolved, we do not propose responding to any correspondence in respect of these proceedings, but will do so (if necessary) once this issue is resolved.
In respect of any proposed discontinuance, our client reserves its position as to costs.
Another letter sent on the same day drew attention to the decision of Schmidt J in the case of Robyn Smith v Chevelle Developments cited above.
A response from counsel for the applicant dated 13 May 2005 contended that:
The relief available to Dr O'Sullivan pursuant to s 113(b) of that Act [see now 108 of the Anti-Discrimination Act], is wholly or in part excluded from the property divisible amongst creditors pursuant to the provision of 116 (2) of the Bankruptcy Act 1966.
…
In relation to the part heard proceedings before the Administrative Decisions Tribunal, clearly this is a matter of great importance and significance, and if the Respondent seeks to make any application to the Administrative Decisions Tribunal that the extant proceedings be stayed or dismissed in whole or in part on the basis that Dr O'Sullivan is an undischarged bankrupt, then such application ought to be made forthwith and an urgent hearing date ought to be appointed.
In that respect you referred to paragraph 14 of the short minutes of order filed 13 April 2005. I confirm that Dr O'Sullivan does not require you to give seven (7) days notice to make application to the Tribunal on this point, and should the Respondent wish to make application for stay and/or dismissal of the proceedings before the Administrative Decisions Tribunal on the basis of Dr O'Sullivan's bankruptcy, your client is invited and encouraged to do so forthwith.
That letter drew a response from the respondent's solicitors, dated 19 May 2005, which said:
We refer to previous correspondence and advise that the first available date that we could obtain in the matter before the Tribunal to argue the bankruptcy issue is the 16th June 2005 at 11.00 am.
As you seem to be of the opinion that our application in respect of your client's bankruptcy will fail, we will object to any application by you to extend time for any matter on the ground that this issue is outstanding.
A lengthy letter from counsel for the applicant dated 20 May 2005, maintained his earlier contention:
there is absolutely no logical basis upon which your client can seek to have the extant proceedings in the Administrative Decisions Tribunal stayed and/or dismissed on the basis of Dr O'Sullivan's being an undischarged bankrupt.
That letter enclosed the previous 2004 correspondence with the ITSA. It appears that all of this correspondence was also copied to the ADT, and further correspondence is also evidence in front of me conducted by counsel for the applicant with the Tribunal and indeed with Registrar's of this Court, concerning, “the bankruptcy issue”. It is unnecessary for me to recite the contents of all this correspondence. It may or may not be relevant to questions of costs but I do not regard it as being otherwise of much relevance to the issues that I have to decide.
Counsel for the applicant and his solicitors expressed concern in their correspondence, and in submissions to me, that the position of the respondent in relation to the competency of the proceedings in the ADT had not been clearly stated by the respondent. However, ultimately, the respondent’s position was indicated in a letter of 6 July 2005:
…we have no current instructions to either challenge the legal capacity of Dr O'Sullivan or the continuation of the proceedings in the ADT. However, our client reserves its right to do so if it considers it appropriate, depending on:
(a) the outcome of your application in the Federal Magistrate's Court; and
(b) the outcome of the strike-out application before the ADT concerning your client's conduct of the case and the failure to comply with directions.
Counsel for the respondent explained the respondent's position on the basis that it could not decide whether to raise in the ADT the effect of the Bankruptcy Act on the ADT proceedings, until further elucidation was given by the applicant as to his claims by way of the amended pleading which had been ordered by the ADT, in particular as to the relief being sought under the Anti-Discrimination Act. The reasonableness of taking this position in the ADT is not easy for me to assess and may not significantly affect the issues I have to decide today, although it may affect issues of costs in this court and in the ADT. However, the respondent also took the position in this court, that it would be premature for this court to make declaratory orders as to the effect of the Bankruptcy Act on the ADT proceedings. As I shall indicate below, I have accepted this submission.
Also tendered in evidence before me was recent correspondence between solicitors for the Official Trustee and the solicitors for the applicant and the respondent. It emerged from this correspondence, that in very recent times the applicant made a request to the Official Trustee “to adopt the litigation” being conducted in the ADT. The terms of that request are not in evidence before me.
The most recent communication from the solicitors for the Official Trustee is a letter of 7 July 2005, which states:
Our client is refraining from considering your client's request to adopt the litigation until his application in the Federal Magistrate's Court has been determined. Our client is not prepared to incur the costs and allocate the required resources to your client's request in circumstances where such efforts may be unnecessary and no benefit flow to creditors if your client's application is successful.
The letter also indicates that the Official Trustee would require comprehensive details of the litigation and advices from counsel before considering the applicant’s request further. However, it is unclear to me whether the applicant intends to maintain a request that the Official Trustee become involved in the ADT proceedings, since in his solicitor’s last letter to the solicitors for the Official Trustee, dated 7 July 2005, it is maintained:
We remain of the view that our client is entitled to pursue his action in the ADT and that the information provided to us by your client on 8 November 2004 and 26 May 2005 is correct.
Whatever the situation in relation to such a request, it is plain that the present application before me does not include or contain an application to this Court for a review of a Trustee's determination under s.178 of the Bankruptcy Act in relation to decisions or actions of the Trustee concerning the present proceedings in the ADT (c.f. Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 138-9). This, no doubt, explains why the Trustee has prudently taken the course of submitting to the outcome of the present proceedings. It is also plain that the Official Trustee does not at present consider that the continuation of the ADT proceedings by the applicant has any significance in terms of the administration of his bankrupt estate.
The absence of any involvement by the Official Trustee in the present application, and the absence of any apparent effect of the relief sought by the applicant on the current administration of his bankrupt estate, add to the other reasons explained below why I consider it inappropriate for this Court to give declaratory relief as is sought in the present application.
At this point, it is convenient to set out in full the terms of the relief sought by the applicant in his application to this court:
1)A Declaration pursuant to the provision of Section 30 of the Bankruptcy Act 1966 that Brenda Thomas O’Sullivan (the Bankrupt) is entitled to maintain and continue to prosecute the proceedings brought by the Bankrupt in proceedings 1320 of 2002 (the ADT proceedings);
2)A Declaration pursuant to the provisions of Section 30 of the Bankruptcy Act 1966 that any monetary damages awarded to the Bankrupt in the ADT proceedings are exempt property within the meaning of Section 116(2)(g) of the Bankruptcy Act 1966;
3)A Declaration pursuant to the provisions of Section 30 of the Bankruptcy Act 1966 that the written advice provided by Ms Anita Zrilic on behalf of the Insolvency and Trustee Service of Australia (ITSA) by letter dated 8 November 2004 to Mr Christopher Murtough Barrister (Annexure “A”) is correct;
4)A Declaration pursuant to the provisions of Section 30 of the Bankruptcy Act 1966 that the relief sought by the Bankrupt pursuant to Section 108 (formerly Section 113) of the Administrative Decisions Tribunal Act 1977 (sic) is not property divisible amongst creditors within the meaning of Section 116(1) of the Bankruptcy Act 1966;
5)In the alternative a declaration pursuant to the provisions of Section 30 of the Bankruptcy Act 1966 as to which parts of any property recoverable pursuant to Section 108 (formerly Section 113) of the Administrative Decisions Tribunal Act 1977 is property divisible amongst creditors within the meaning of Section 116(1) of the Bankruptcy Act 1966;
6)In the alternative that leave be granted to the Bankrupt to the extent that any such leave is necessary to proceed with the Bankrupt’s action against the Respondent in the ADT proceedings.
7)That the costs of and incidental to this application be payable by the Central Sydney Area Health Service as agreed or assessed forthwith upon an indemnity basis;
8)In the alternative that the partners of Bolzan and Dimitri show cause why an Order ought not be made personally against those solicitors that the costs of the Complainant be paid by those solicitors forthwith on an indemnity basis.
Counsel for the applicant did not press the claim made in paragraph 8, but sought the making of declaratory orders in the terms indicated in the other paragraphs.
Counsel for the respondent pointed to well known principles concerning the discretionary nature of a jurisdiction to make declaratory orders and the caution with which it should be exercised, including Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, Ibeneweka v Egbuna [1964] 1 WLR 291, and Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438. Counsel pointed to numerous difficulties in the framing of the declarations sought in the current application, and to the uncertainties which might arise if they were made in the terms sought. I consider that his criticisms as to their form and effect are valid.
However, I shall not rest my decision upon the form of the declaratory orders sought, but I shall assume that it might be possible to formulate a declaration properly addressing the issue of the competency of the applicant to pursue all or parts of a claim for relief which has been brought under s.108 of the Anti-Discrimination Act in proceedings in the ADT, provided that a proper foundation could be found.
Before making such a declaration, I would need to make clear findings as to what was the true nature of the relief which was the subject of the ADT proceeding brought by the applicant, and then determine the extent to which it was, either in whole or part, “in respect of any personal injury or wrong done to the bankrupt” as distinct from an action concerning a species of property which would otherwise fall within the bankrupt estate or some other sort of action (c.f. Daemar v Industrial Commission of NSW (1988) 12 NSWLR 45 at 55-57). Only by making such findings would it be possible to identify the extent to which either the stay under s.60(2) or the exemption under (4) had effect. Only after such findings were made would I be able to address the sometimes difficult legal and factual questions which authorities have pointed to in relation to whether heads of relief sought in an action are severable, so that a bankrupt may be allowed to continue part of a claim for relief split from a claim which related to property passing in to the bankrupt estate or was otherwise not within the exemption under s.60(4) (c.f. the principles on “splitting” discussed in Bullock v Goodluck (supra)). If, after making such findings and applying the authorities, I decided that some of the relief sought by the applicant under s.108 of the Anti-discrimination Act could be identified as severable claim, which survived s.60(2) of the Bankruptcy Act, I would then have to make factual findings as to which components of relief survived.
It would be quite wrong for me to make declarations in respect of this unless I were confident that I could properly appreciate the nature of relief which was the subject of the proceedings in the ADT. On the established authorities cited above, any generally worded declaration would be “hypothetical” unless it were tied to the heads of relief actually litigated in the ADT. In particular, in relation to a claim for compensation under s.108(2)(a), it would be necessary to identify whether the applicant seeks to be compensated for losses referable to property rights which would have fallen within the bankrupt estate, or for personal injuries. Given the relatively small cap provided by s.108(2)(a) it might be quite possible for an applicant with potential claims for financial or property losses as well as personal injuries to abandon property-related claims which would have passed to the bankrupt estate.
However, in the present matter I consider that the evidence does not allow me to make these necessary findings. It seems, indeed, that the applicant has yet to present to the ADT even the broadest indication of the relief which he seeks. If (which I am not prepared to do) I assumed that a future pleading would conform to the heads foreshadowed in the submissions of counsel for the applicant, these would still leave large areas of uncertainty as to the nature of parts of his claimed relief, particularly concerning the heads of compensation which will be claimed.
I therefore accept the submission of counsel for the respondent that it would be premature for me, on the present evidence, to attempt to decide the issues which the applicant has sought to canvass as to the extent, if at all, to which s.60(4) allows his ADT proceedings to continue.
I have some difficulty understanding how the ADT itself could form a judgment as to these issues on the applicant’s current “points of claim”, but I am poorly informed as to the extent of the material before it and the stage at which the proceedings have reached. What I have said above should not be taken by the parties or the ADT as indicating any opinion on whether the ADT is at present in a position to rule upon the effect of the Bankruptcy Act on the proceedings currently before it. This is a matter for its own judgment.
This brings me to my further basis for declining the relief sought in the present application. It is my firm opinion, in the context of the present matter, that it is more appropriate for these bankruptcy issues to be addressed by the ADT, if and when they are raised in its proceedings, and at a point of time when it considers them most suitably addressed.
In my view it is open to either party to request the ADT to address them, and I note that neither party has so far done so. There is no evidence suggesting that it would decline to make rulings upon the issues in an appropriate way. Counsel for the applicant has not persuaded me that the ADT lacks power to rule upon the issues, and as I have explained above, I consider that it does. It is a body with judicial powers, and must have power to address matters going to its own jurisdiction, and, in particular the standing or competence of an applicant before it to pursue the heads of relief he seeks. The effect of s.60 of the Bankruptcy Act in this respect raises issues no different than the application of any other legislation governing proceedings before the ADT. If at first instance the ADT was thought to err in any decision it made, the Administrative Decisions Tribunal Act 1997 (NSW) provides a rights of appeal on questions of law to an Appeal Panel, and then to the Supreme Court.
The ADT is currently familiar with the present proceedings, which have apparently achieved a complexity that I have only been able to get a glimpse of. The ADT is familiar with the legislation under which the action has been brought, and is in my opinion more suited than I to assess the general legal nature of the remedies available under the Anti-Discrimination Act. I do not regard the issues of the effect of s 60 as being in any respect an exclusive province of this Court.
I therefore consider that these bankruptcy issues should be raised, if at all, in the course of the present ADT proceedings and not by way of an application to this court of the present sort.

I appreciate the arguments to the contrary made by counsel for the applicant, based on convenience. He pointed out that the applicant had now attempted to argue these points before me, and submitted that I should therefore rule upon them in a substantive way. But as I have indicated, the material he was able to present was far from allowing me to be satisfied as to relevant matters. A further attempt to properly equip this Court to make the necessary findings as to the nature of all parts of the relief being litigated in the ADT is likely to require a duplication of proceedings which, in my view, would be manifestly undesirable, and ultimately would not save expense to either party.
In the material presented to me there is reference to a desire on the part of the applicant's lawyers for clarification of the current position of the litigation due to their providing assistance on a speculative fees basis. I cannot see how that consideration is a proper consideration in relation to the matters I have to decide.
I appreciate that difficult decisions may need to be made by the applicant as to whether he will continue his ADT proceedings, but his difficulties arise inherently from how he has presented his claims to the ADT and the fact of his bankruptcy. Unfortunately, I do not consider that they can be solved by the present application to this court.
For the above reasons, I have decided that I should dismiss the application.

I certify that the preceding sixty four (64) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate: Iliya Marovich-Old

Date: 18 July 2005