Ritson v Ryan

Case [2024] QCA 236

SUPREME COURT OF QUEENSLAND

CITATION:

Ritson v Ryan [2024] QCA 236

PARTIES:

BRENDAN RITSON
v
JONATHAN LAURENCE RYAN
(appellant)

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
(first respondent)
ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND
(second respondent)(third respondent)

FILE NO/S:

Appeal No 5084 of 2024
SC No 12717 of 2023

DIVISION:

Court of Appeal

PROCEEDING:

Application for Leave/Judicial Review

ORIGINATING COURT:


Supreme Court at Brisbane – [2024] QSC 76 (Crowley J)

DELIVERED ON:

22 November 2024

DELIVERED AT:

Brisbane

HEARING DATE:

25 September 2024

JUDGES:

Mullins P and Freeburn and Cooper JJ

ORDER:

The application for leave to appeal is dismissed.

CATCHWORDS:

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 – INSTITUTION OF ACTIONS AFTER SEQUESTRATION – where the appellant, as the assignee of choses in action, commenced a proceeding against the first respondent in the Queensland Civil and Administrative Tribunal (QCAT) – where a sequestration order was subsequently made against the appellant’s estate – where that order was later suspended to allow the appellant to prosecute the QCAT proceeding – where the QCAT proceeding was dismissed – where the appellant applied for leave to appeal against the dismissal of the QCAT proceeding, but leave was refused – where the appellant subsequently applied for judicial review of the two QCAT decisions – where the primary judge dismissed the appellant’s judicial review application on the basis that because the appellant was an undischarged bankrupt, his right to apply for judicial review of the QCAT decisions was properly characterised as “property” which had vested in the appellant’s trustees in bankruptcy and the appellant therefore lacked standing to bring the application – where the appellant argued that the primary judge erred by: finding that the right to bring the application for judicial review is “property divisible amongst the creditors of the bankrupt” within the meaning of the Bankruptcy Act 1966 (Cth); finding that a payment the appellant received from the Defence Abuse Reparation Scheme was not “protected money” within the meaning of the Bankruptcy Act; not accepting the appellant’s evidence that that payment was used to purchase the choses in action which were the subject of the QCAT proceedings; finding that the order suspending the sequestration order did not extend to the application for judicial review; and failing to address four arguments the appellant advanced in response to the application brought by the third respondent to dismiss the QCAT proceedings – whether the appellant should be granted leave to appeal

Bankruptcy Act 1966 (Cth), s 5, s 58, s 116
Judicial Review Act 1991 (Qld), s 48

Brisbane City Child Care Pty Ltd v Kadell (2020) 5 QR 367; [2020] QCA 181, cited
Cirillo v Citicorp Australia Ltd (2004) 2 ABC(NS) 525; [2004] SASC 293, approved
Cummings v Claremont Petroleum NL (1996) 185 CLR 124; [1996] HCA 19, followed
Daemar v Industrial Commission of…

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Ritson v Ryan [2024] QCA 236
Case
[2024] QCA 236
Decision Date

CaseChat Overview and Summary

In the case of Ritson v Ryan, the primary issue was whether the appellant, Mr Ritson, had standing to apply for judicial review of decisions made by the Queensland Civil and Administrative Tribunal (QCAT) after being declared bankrupt. Mr Ritson, as the assignee of choses in action, had initiated proceedings against Mr Ryan in QCAT. Subsequently, a sequestration order was made against Mr Ritson's estate, which was later suspended to allow him to continue the QCAT proceeding. The QCAT proceeding was ultimately dismissed, and Mr Ritson sought leave to appeal that decision, which was refused. He then applied for judicial review of the QCAT decisions, arguing that the primary judge erred in various respects, including the characterisation of his right to apply for judicial review as "property" that vested in his trustees in bankruptcy, the classification of a payment he received as "protected money", and the scope of the Federal Court order suspending the sequestration order.

The primary judge dismissed Mr Ritson's application for judicial review, holding that his right to apply for judicial review was properly characterised as property that vested in his trustees upon the making of the sequestration order. The judge also found that the payment Mr Ritson received from the Defence Abuse Reparation Scheme was not "protected money" within the meaning of the Bankruptcy Act 1966 (Cth), and that the Federal Court order suspending the sequestration order did not extend to the application for judicial review. Additionally, the primary judge rejected Mr Ritson's contention that he had used the Reparation Payment to purchase the choses in action against Mr Ryan, and did not address certain arguments Mr Ritson advanced in response to an application to dismiss the QCAT proceeding.

The court considered Mr Ritson's grounds for appeal and found that none demonstrated error in the primary judge's reasoning. The court concluded that the primary judge correctly identified the issues and applied the law to the facts, determining that Mr Ritson did not have standing to bring the application for judicial review of the QCAT decisions. As a result, the application for leave to appeal was dismissed.

The court ordered that the application for leave to appeal be dismissed, and no further appeal would be permitted on the grounds presented.

Orders

Orders of the court

The application for leave to appeal is dismissed.

Background

Background to the litigation

For the reasons which follow, none of the proposed grounds of appeal have been made out. Mr Ritson has not demonstrated error in the reasoning of the primary judge. In those circumstances, there would be no utility in granting leave to appeal. The application for leave to appeal should be dismissed.Background to the judicial review application In the QCAT Proceeding, Mr Ritson claimed that: four people had paid fees to Mr Ryan for courses which would prepare them to undertake pilot aptitude tests; Mr Ryan did not provide any services in exchange for those course fees; and, the four people were entitled to repayment of the course fees as a debt. Mr Ritson brought the QCAT Proceeding as the assignee of the chose in action from each of the four people who had paid the course fees without receiving any services from Mr Ryan. On 12 August 2021, the Federal Circuit Court of Australia made a sequestration order against Mr Ritson’s estate.[3][3]Commissioner of Police (NSW) v Ritson (No 5) (2021) 362 FLR 225. Mr Ritson appealed against the making of the sequestration order and applied for proceedings under it to be stayed pending the determination of his appeal. In that context, Mr Ritson wrote to his Trustees and noted that the QCAT Proceeding was stayed until the Trustees made an election to prosecute or discontinue it. He advised the Trustees that if they did not elect to prosecute the QCAT Proceeding he would press his application to stay proceedings under the sequestration order pending the determination of his appeal. The Trustees responded by informing Mr Ritson that their intention was to discontinue the QCAT Proceeding because, in their opinion, it was not commercially sound to prosecute it further. On 24 September 2021, Halley J made the Federal Court Order which relevantly provided:“The operation of the sequestration order made against the estate of [Mr Ritson] on 12 August 2021 be suspended to the extent necessary to permit the appellant to prosecute the [QCAT Proceeding].” In making the Federal Court Order, Halley J accepted that at least one of Mr Ritson’s grounds for appealing the sequestration order was arguable or had some rational prospect of success. Further, Halley J considered that, given the Trustees’ intention to discontinue the QCAT Proceeding, the balance of convenience favoured the suspension of the sequestration order to the extent necessary to permit Mr Ritson to maintain that proceeding.[4][4]Ritson v Commissioner of Police (NSW) [2021] FCA 1315, [47]-[48]. The first QCAT decision for which Mr Ritson sought judicial review was made on 21 October 2021. By that decision, Adjudicator Katter dismissed the QCAT Proceeding on the basis that the four assignors of the choses in action against Mr Ryan did not have a sufficient connection to Queensland to engage QCAT’s jurisdiction and Mr Ritson (as the assignee of the choses in action) had no right to commence any proceeding against Mr Ryan in QCAT.[5] Mr Ritson applied for leave to appeal against the dismissal of the QCAT Proceeding.[5]Ritson v Ryan [2021] QCAT 364.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

On 10 October 2023, Mr Ritson filed his application for review of the QCAT decisions under s 43 of the JRA.The primary judge’s decision The primary judge identified the issues in dispute on the third respondent’s application as: (i) whether Mr Ritson’s application for judicial review of the QCAT decisions is property which vested in the Trustees upon the making of the sequestration order; (ii) whether the debt the subject of the QCAT Proceeding is property which vested in the Trustees; and (iii) whether the Federal Court Order permitted Mr Ritson to bring his application for judicial review of the QCAT decisions. On the first issue, after reviewing the relevant statutory provisions and authorities, the primary judge concluded that Mr Ritson’s application for judicial review took its character from the underlying claims which were the subject of the QCAT Proceeding. If those underlying claims are properly characterised as property which vested in the Trustees, then so too is Mr Ritson’s application for judicial review. On the second issue, the primary judge addressed Mr Ritson’s argument that, because he purchased the choses in action which were the subject of the QCAT Proceeding using the Reparation Payment, s 116(2)(n) of the Bankruptcy Act applied to exempt his claims against Mr Ryan from the operation of s 116(1). That exemption applies where property is purchased with “protected money” which is defined to include, relevantly, damages or compensation for personal injury or wrong done to the bankrupt – see ss 116(2)(g) and 116(2D) of the Bankruptcy Act. The primary judge gave two reasons for rejecting Mr Ritson’s argument that he had used “protected money” to purchase the choses in action. First, the primary judge did not accept that the Reparation Payment was “damages or compensation” within the meaning of s 116(2)(g) of the Bankruptcy Act. Properly construed, that provision applies to damages or compensation which a bankrupt recovers in an action for personal injury or wrong. Further, the Commonwealth Parliament has determined that particular payments which do not fall within this description are nevertheless exempt from the operation of s 116(1) of the Bankruptcy Act. Examples include payments made under the National Redress Scheme for Institutional Child Abuse Act 2018 – see s 116(2)(ga) – and payments made under the Territories Stolen Generations Redress Scheme – see s 116(2)(gb). No similar determination was made in respect of payments made under the Defence Abuse Reparation Scheme. Secondly, the primary judge was not satisfied on the evidence before him that Mr Ritson in fact used the Reparation Payment to purchase the choses in action against Mr Ryan. On the third issue, the primary judge rejected Mr Ritson’s argument that the inclusion of the words “to the extent necessary” in the Federal Court Order meant that it should be construed as extending to his application for judicial review of the QCAT decisions. His Honour determined that the scope of the Federal Court Order was limited to permitting Mr Ritson to pursue the QCAT Proceeding itself.

Ratio Decidendi

Legal Principle Established

Having decided each of those three issues against Mr Ritson, the primary judge concluded that he did not have standing to bring the application for judicial review of the QCAT decisions and, on that basis, accepted that it was not appropriate for that application to continue.ConsiderationGround 1 Mr Ritson advances arguments about the nature of the right to apply for judicial review and whether that right comes within the ordinary legal meaning of the term “property”. He submits that the right conferred by the JRA – to apply for a statutory order of review under s 20(1) or for a prerogative order under s 44 – does not have the usual characteristics of property. It is nothing more than the right to bring the relevant application and have that application heard according to law. The discretionary nature of the relief which might be available to an applicant under the JRA means that the right is not capable of assignment to or assumption by a third party. He also relies on the principle that prerogative relief of the type sought in his application for judicial review is not wholly personal to the party applying for such relief, but inheres in the legal system itself. These submissions do not demonstrate error by the primary judge. The relevant question is not whether the right to apply for judicial review is property according to general concepts. It is whether that right is property within the meaning of the Bankruptcy Act.[9][9]Cummings v Claremont Petroleum NL (1996) 185 CLR 124, 145; Rana v Musolino (2009) 7 ABC(NS) 531, 537-538 [29]. Upon the making of a sequestration order, “the property of the bankrupt” vests in the Official Trustee or the trustee of the bankrupt’s estate pursuant to s 58 of the Bankruptcy Act. The terms “property” and “the property of the bankrupt” are both defined in s 5(1) of the Bankruptcy Act. “Property” means “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”. “The property of the bankrupt” means:“(i)the property divisible among the bankrupt’s creditors; and(ii)any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt.” Property divisible among the bankrupt’s creditors is then identified in s 116(1). Subject to specific exemptions set out in s 116(2), it relevantly includes:“(a)all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and(b)the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; …”