Trkulja v State of Victoria

[2001] VSC 62

SUPREME COURT OF VICTORIA
COMMON LAW DIVISION	Not Restricted

No. 8187 of 1992

MILORAD TRKULJA	Plaintiff
v.
STATE OF VICTORIA AND ROBERT PATTISON	Defendants

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JUDGE:	NATHAN, J.
WHERE HELD:	MELBOURNE
DATE OF RULING:	8 MARCH 2001
MEDIUM NEUTRAL CITATION:	[2001] VSC 62

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CATCHWORDS:      Ruling – Claim in negligence – Application of Bankruptcy Act, s.60(4) – Whether loss claimed in respect of personal injury or wrong.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Appeared on his own behalf
For the Second Defendant	Mr. D. Masel and Miss S. MacDougall	Victorian Government Solicitor
For the 15th Defendant	Mr. R. Cameron	Peter Eggleston & Associates

HIS HONOUR:

1. Both defendants join in an application the effect of which is to non-suit the plaintiff by contending that the particulars of damage pleaded cannot stand, must be struck out and, with that, the entire cause of action.  The nature of the application has been described by Mr Justice Byrne in Brenna v First Artist Management [1993] 2 VR at 221, at 274 as suspending the cause of action or rendering it nugatory but capable of some form of revivification. Some background is required.

1. The plaintiff was a building contractor and he sues in negligence, contending that the defendants failed to inspect works for which he received payment when in fact the works were not done.  The substance of his claim is that this breach of a duty owed to him resulted in him being charged with theft and obtaining property by deception and ultimately being acquitted by direction of that charge, whereby he now says he has suffered, and I recite the pleadings, the following loss:  "The plaintiff has suffered the odium and contempt of colleagues and customers in the building industry."  He also seeks "damages for physical inconvenience and mental distress."

1. The plaintiff was made bankrupt on 21 February 1995 and discharged on 7 March 1998.  He was made bankrupt again last year 2000.  His trustee in bankruptcy did not seek to pursue this cause of action.  It is therefore subject to the provisions of the Bankruptcy Act s.60(4) which I need to rehearse:

"Notwithstanding anything contained in this section, a bankrupt may continue, in his own name, an action commenced by him before he became a bankrupt in respect of:

(a)any personal injury or wrong done to the bankrupt, his spouse or family;  …"

1. The issue becomes whether the damage he now sustains in respect of the cause of action he pleads seeks to recover in respect of a personal injury or wrong done to him.  It is, of course, a right in personam.

1. There is much authority as to the property rights involved and what is exempted from the effect of s.60.  In effect, s.60 deprives the bankrupt of the entitlement to proceed unless the trustee so determines.  But excluded from the general power to pursue actions are those rights which are personal to the bankrupt in respect of a personal injury or wrong done to him.

1. The text MacDonald's Bankruptcy Law and Practice properly, in my view, recites the law and refers to the appropriate authorities.  It commences, as indeed it should, with a quote from Dixon J (as he then was) in Cox v. Journeaux & Ors (No.2) (1935) 52 C.L.R. 713 at 720:

"The test [for whether a claim is for personal injuries under s.60(4)] appears to be whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property."

1. Dixon J continued: 

"The plaintiff's pleader has done his best to bring the claim within the description of injury which remains actionable at the suit of a bankrupt.  An attempt to go behind the formulation of the claim for damages and look at the actual facts inevitably leads back to an examination of the cause of action, and, as my conclusion is that none exists or could be discovered, I have felt it better not to engage in a futile consideration of the hypothetical question which classification it would fall under if it had a real or colourable existence."

1. I pursue the line of inquiry adumbrated in that dictum and I am comforted in that thought because the same method was adducted by Kirby P in the matter of Mannigel v. Hewlett Phelps (New South Wales Court of Appeal BC9101907).  In a similar case dealing with solicitors Kirby P. examined whether the causes of action there were divisible or indivisible.  He came to the view that the causes of action were not divisible.  There could be no discernment of a personal right compared with a property right and as such the entire cause of action was not saved by the provisions of s.60(4).

1. Similar comments are to be found in Daemar v. Industrial Commission of New South Wales (1988) 90 F.L.R. 490 and particularly the judgment of the President at p.473 et seq. Therein the Judge examines the purpose of the Act and he recites it in these terms:

"The provisions make it clear that the scheme and purpose of the Act is, upon a debtor's becoming a bankrupt, to transfer property rights, including certainly the right to sue in respect of claims of property, from the bankrupt to his trustee."

1. In my view I must ascertain whether the pleadings reveal a wholly or a substantial personal right alleged to have been infringed and for which damages are sought in respect of the pleadings.

1. It was put by Mr Cameron and Mr Masel that really what the plaintiff was saying is that because he was allegedly prosecuted maliciously or unfairly, and he was charged, his business thereby failed and accordingly the damage for which he now sues is a property claim rather than a personal claim.

1. I am not convinced that that is correct.  In my view the pleadings on a fair reading seek personal injuries and on a fair reading posit a personal claim in respect of the odium and contempt he suffered as a result of being charged and acquitted.

1. There may well have been consequential property losses for which he has no cause of action and I will not allow the case to proceed as if there were.  But insofar as he seeks to recover for himself damages because he became the subject of odium and contempt then indeed that is a personal right and one which survives the strictures of s.60(4).

1. The negligence he claims is for the failure, as I have said, of the defendants to check whether the work was done or not.  Had it been checked then indeed he would not have been charged.  It was not checked, he was charged, he was arrested, and he says that as a result of that, he suffered physical inconvenience and mental distress.  He says that in breach of the duty which the defendants owed to him, those consequences of inconvenience, distress, odium, and contempt all followed.

1. They are personal claims.  The Act would mean nothing if it did not go to preserve the actions in personam for personal injury.  The pleadings therefore should not be seen as wrapped up with, let alone as being a consequence of, a property action claim.

1. I appreciate the plaintiff appears in person, and will have difficulty in understanding the distinction I have drawn, as is the law, between property losses consequent upon the events which he says befell him, and the personal loss, which his pleadings say befell him.  It follows then that the application to either stay, set aside, suspend, or otherwise strike out the plaintiff's cause of action must fail.

1. There stands afoot the plaintiff's further and better particulars which are, to use as benign a term as I can find, wildly extravagant and travel far outside the terms of the judgment I have just given. 

1. The further and better particulars were drawn at a time when the plaintiff thought he had afoot a claim for damages for malicious prosecution.  That is not now the case.  The particulars were drawn when he failed to appreciate the distinction between property loss and personal loss, and they consequently are not in conformity with the judgment I have just given.

1. Therefore the appropriate course is for me to strike out the plaintiff's further and better particulars of his loss, require him overnight to re-plead them in the terms of the judgments I have just pronounced, and the matter will now proceed.

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