Re Dosanjh; Ex parte Duus - [1995] FCA 163

CATCHWORDS

BANKRUPTCY - property available to creditor - whether money received as special damages available to creditor

Bankruptcy Act 1966 ss 60(4), 116(1), 116(2)(g), 116(2)(n), 116(2D)(b)

Cox v Journeaux (No 2) (1935) 52 CLR 713 Refd
Faulkner v Bluett (1981) 52 FLR 115 Cons
Mannigel v Hewlett Phelps (unreported decision of New South Wales Court of Appeal, 12.6.91) Cons
Beckham v Drake (1849) 2 HLC 599 Cons
Wilson v United Counties Bank Ltd [1920] AC 102 Cons
Re Linklater Ex parte: Mount (unreported decision of von Doussa J 29.10.90) Cons
Griffiths v Kerkemeyer (1977) 139 CLR 161 Refd
Van Gervan v Fenton (1992) 66 ALJR 828 Refd

Re Manjit Dosanjh; Ex parte: Ross Andrew Duus
No QB843 of 1994

Kiefel J Brisbane 29 March 1995

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT
OF THE STATE OF QUEENSLAND No. QB843 of 1994

RE:MANJIT DOSANJH

EX PARTE:ROSS ANDREW DUUS Trustee of the Estate of MANJIT DOSANJH

JUDGE MAKING ORDER: Kiefel J.

DATE OF ORDER: 29 March 1995
WHERE MADE: Brisbane

MINUTES OF ORDERS

THE COURT ORDERS THAT:

The application be dismissed.

NOTE:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT
OF THE STATE OF QUEENSLAND No. QB843 of 1994

RE:MANJIT DOSANJH

EX PARTE:ROSS ANDREW DUUS Trustee of the Estate of MANJIT DOSANJH

CORAM:  Kiefel J.
DATE:  29 March 1995
PLACE:  Brisbane

REASONS FOR JUDGMENT

The trustee seeks a declaration that the sum of $29,313 is property which is divisible amongst the bankrupt's creditors under s.116(1) Bankruptcy Act 1966 and for orders declaring that the trustee has a beneficial interest in properties to which those monies have been applied. The sum is in fact the amount owed by the bankrupt to the petitioning creditor, a hospital authority, and represents charges for services rendered to him consequent upon a motor vehicle accident in which he was injured.

By a deed of release dated 20 February 1992 the bankrupt agreed to accept the sum of $300,000 plus his reasonable legal costs in full settlement of all claims for damages for personal injuries which he may have against the driver of the vehicle in question, one Olano. He had previously brought action in the Supreme Court of Queensland for damages. In a letter dated 18 February 1992 from his then solicitors to the Department of Social Security it was said that the amount of $300,000
had been notionally allocated by them (perhaps for the purpose of advising their client as to its acceptance) as follows:
General Damages $60,000.00

Out of Pocket Expenses including
hospital bills 30,000.00

Economic loss from date of accident
to date of trial 50,000.00

Future Economic loss 160,000.00

It does not appear that any attempt was made to levy or execute upon the bankrupt's property for the hospital charges unpaid, and bankruptcy proceedings were commenced.

On 4 March 1992 Mr Dosanjh and…

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.

Continue reading Re Dosanjh; Ex parte Duus

Details

AGLC: Re Dosanjh; Ex parte Duus [1995] FCA 163
Case: [1995] FCA 163
Decision Date: 29 MARCH 1995

CaseChat Overview and Summary

The case before Kiefel J in the Federal Court of Australia involved a dispute between the trustee of the bankrupt's estate and the petitioning creditor, Ross Andrew Duus. The trustee sought a declaration that the sum of $29,313, owed by the bankrupt to the hospital authority and representing charges for services rendered due to a motor vehicle accident, was property available for division among the bankrupt's creditors. The bankrupt, Manjit Dosanjh, had previously settled his claims for damages with the hospital authority by a deed of release dated 20 February 1992, agreeing to accept $300,000 plus legal costs in full settlement.

The legal issues revolved around the interpretation of sections 116(2)(g) and 116(2D)(b) of the Bankruptcy Act 1966, which provide that any right of the bankrupt to recover damages or compensation for personal injury or wrong done to the bankrupt, and any damages or compensation recovered, are exempt from being divisible among creditors. The court had to determine whether the settlement monies received by the bankrupt and applied to the properties were damages or compensation recovered by the bankrupt in respect of personal injury and whether these properties were exempt and not available to his estate.

Kiefel J held that the settlement monies received by the bankrupt and applied to the properties were damages or compensation recovered by the bankrupt in respect of personal injury. The properties acquired with these monies were exempt and not available to his estate. The court found that the distinction between "general damages" and "special damages" was misleading and that the true nature of the loss was compensation for the injury or wrong done. The monies paid by way of compensation under the deed of release were compensation for personal injury within the meaning of s.116(2)(g). Therefore, the properties were exempt, and the application by the trustee was dismissed.

The court ordered that the application be dismissed. The matter of costs would be heard separately.

Orders