Rana v Musolino - [2009] FCA 1050

FEDERAL COURT OF AUSTRALIA
Rana v Musolino [2009] FCA 1050
BANKRUPTCY – whether show cause proceedings in the High Court vested in bankrupt applicant's trustee – applicant challenging trustee's decision to issue notice of discontinuance in High Court – whether decision challenged in show cause proceeding related in part to a claim for damages for “personal injury or wrong” – personal claim integrally interconnected with substantive non-personal claims – unnecessary to consider apportionment
PRACTICE AND PROCEDURE – summary dismissal – Federal Court of Australia Act 1976 (Cth) s 31A – Federal Court Rules O 20 r 5 – application having no reasonable prospects of success – High Court seized of the matter
Administrative Decisions (Judicial Review) Act 1976 (Cth)
Bankruptcy Act 1966 (Cth) ss 58(1), 60(2), 60(3), 60(4)(a), 60(5), 116(2)(g), 134(e), 134(j), 134(o), 178
Federal Court of Australia Act 1976 s 31A
Trade Practices Act 1974 (Cth) s 52
Federal Court Rules O 20 r 5
Tait v Harris [2003] FCA 446 cited
Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 applied
Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 592 cited
Rana v University of Adelaide [No 2] [2008] FCA 494 cited
Walton v Gardiner (1993) 177 CLR 378 cited
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 applied
Daemar v Industrial Commission of New South Wales [No 2] (1990) 22 NSWLR 178 considered
Madden v Madden [1995] FCA 297 cited
Fitzpatrick v Keelty [2008] FCA 35 cited
Cox v Journeux [No 2] (1935) 52 CLR 713 cited
Faulkner v Bluett (1981) 52 FLR 115 cited
Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 cited
3 The Laws of Australia, “Bankruptcy” at [3.8.940]
RANJIT SHAMSHER JUNG BAHDUR RANA v ROSEMARIE MUSOLINO, OFFICIAL TRUSTEE IN BANKRUPTCY and AUSTRALIAN GOVERNMENT SOLICITOR
No SAD 206 of 2008
FINN J
18 SEPTEMBER 2009
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 206 of 2008

BETWEEN:
RANJIT SHAMSHER JUNG BAHDUR RANA
Applicant

AND:
ROSEMARIE MUSOLINO
First Respondent

OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent

AUSTRALIAN GOVERNMENT SOLICITOR
Third Respondent

JUDGE:

FINN J

DATE OF ORDER:

18 SEPTEMBER 2009

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:
1.The application be dismissed against each respondent.
2.The applicant pay the costs of each respondent.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 206 OF 2008

BETWEEN:
RANJIT SHAMSHER JUNG BAHDUR RANA
Applicant

AND:
ROSEMARIE MUSOLINO
First Respondent

OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent

AUSTRALIAN GOVERNMENT SOLICITOR
Third Respondent

JUDGE:

FINN J

DATE:

18 SEPTEMBER 2009

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

Ranjit Rana became bankrupt on 13 August 2008. Prior to that date he had a multiplicity of proceedings in this Court. His present amended application, in form at least, relates to decisions allegedly taken by the three…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] FCA 1050
Decision Date: 18 SEPTEMBER 2009

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Rana v Musolino involved a dispute between Mr Rana and the trustee of his bankrupt estate, Mr Musolino. Mr Rana, a bankrupt, sought to challenge decisions made by the trustee regarding various legal proceedings. The central issue was whether Mr Rana had grounds to challenge the trustee's decisions under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) or section 178 of the Bankruptcy Act 1966 (Cth). The court had to determine if the trustee's decisions were indeed reviewable and if Mr Rana had standing to bring such a challenge. The court analysed several proceedings to ascertain whether the trustee had made any decisions that were detrimental to Mr Rana.

The court examined specific proceedings to determine if the trustee had made any decisions that adversely affected Mr Rana. In SAD 48 of 2008, the trustee did not participate and had decided that the matter fell under the personal injury exception of section 60(4) of the Bankruptcy Act. This decision was communicated to Mr Rana, who could not claim to be "a person aggrieved" for AD(JR) Act purposes. The court found that there was no detrimental decision made by the trustee in this proceeding. Similarly, in SAD 83 of 2008, the trustee did not participate and had considered the matter to be excepted by section 60(4), although it did not communicate this to Mr Rana. No application for special leave was made in this case.

The court concluded that Mr Rana had no reasonable grounds to challenge the trustee's decisions under the ADJR Act or section 178 of the Bankruptcy Act. The trustee had not made any decisions detrimental to Mr Rana in the proceedings examined, and therefore, the application was dismissed. The court also ordered that Mr Rana pay the costs of each respondent. This decision underscored the importance of adhering to the legislative framework governing bankruptcy and the limitations on judicial review in such matters.

Orders

Orders of the court

1. The application be dismissed against each respondent.

2. The applicant pay the costs of each respondent.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

FINN J

These provisions have been subjected to considerable judicial exegesis. It suffices for present purposes if I refer without further comment to observations of Kirby P in Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 at 50:These provisions make it clear that the scheme and purpose of the Act is, upon the debtor’s becoming a bankrupt, to transfer property rights, including certainly the right to sue in respect of claims to property, from the bankrupt to his trustee. This is so, notwithstanding that it involves personal inconvenience to the bankrupt: see Faulkner v Bluett (1981) 52 FLR 115 at 119. Indeed, it is so notwithstanding the fact that it deprives the bankrupt of important civil rights which he or she would otherwise normally enjoy. It is of the essence of bankruptcy, as provided for by the Act, that property which belongs to the bankrupt, including choses in action (other than those which are specifically exempted) are vested upon bankruptcy in the bankrupt’s trustee.THE VARIOUS PROCEEDINGS ALLEGEDLY AFFECTED BY THE TRUSTEE’S “DECISIONS” As I noted earlier, the Amended Application in this matter refers to a number of decisions of this Court – and anticipates others – in relation to which it is alleged, the Trustee has taken, or will take, decisions to block proceedings by Mr Rana for constitutional writs or writs to show cause. The allegation is for the most part without foundation, although some of the decisions have been ones in which the Trustee has decided, favourably to Mr Rana, that the actions in question fell within the “personal injury or wrong” exception of s 60(4) of the Bankruptcy Act. For ease in exposition I will use the Court numbering of the various proceedings that are said to be presently relevant. I will deal first with the Federal Court matters and then the two High Court proceedings.(i) SAD 48 of 2008 This was an application for an extension of time to appeal from a decision of a judge of this Court made on 3 April 2008. The application was refused by Mansfield J on 20 October 2008. The Trustee was not a party to the proceeding. It came to the view that s 60(4) of the Act applied to the action as it involved predominantly issues concerning a claim by Mr Rana for personal injuries compensation. Mr Rana was advised of this view by letter dated 10 December 2008. Mr Rana could not claim to be “a person aggrieved” by such a decision of the Trustee for AD(JR) Act purposes. The evidence put on on behalf of the Trustee, which I accept, is that it made no decision, act or omission detrimental to Mr Rana in SAD 48 of 2008. I find Mr Rana has no reasonable ground for impugning the Trustee’s decision under the AD(JR) Act or s 178 of the Bankruptcy Act.(ii) SAD 83 of 2008 On 17 June 2008 a judge of this Court dismissed an application of Mr Rana as vexatious. An appeal from that decision to the Full Court of this Court was dismissed on 21 November 2008. The Trustee was not a party to those proceedings and again took the view that the action was excepted by s 60(4) although it did not communicate this to Mr Rana. No application for special leave was made.

Ratio Decidendi

Legal Principle Established

Established by: FINN J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 206 of 2008

JUDGE:	FINN J
DATE OF ORDER:	18 SEPTEMBER 2009
WHERE MADE:	ADELAIDE

JUDGE:	FINN J
DATE:	18 SEPTEMBER 2009
PLACE:	ADELAIDE