Voskuilen v Morisset Mega Markets

[2005] NSWSC 34

CITATION:	Voskuilen v Morisset Mega Markets [2005] NSWSC 34
HEARING DATE(S):	02/02/05
JUDGMENT DATE :	2 February 2005
JUDGMENT OF:	Gzell J
DECISION:	Proceedings dismissed. Plaintiff ordered to pay defendant's costs of action and motion.

CATCHWORDS:	BANKRUPTCY - Proceedings in Connection with Sequestration - Plaintiff declared bankrupt - Official Trustee indicates will not take part in trial - Whether an election to discontinue - Whether Official Trustee deemed to have abandoned action under the Bankruptcy Act 1966 (Cth), s 60(3) - Whether defendant on motion to dismiss action should have an order for costs out of the bankrupt estate - Whether defendant should have an order for costs of action and motion against plaintiff
LEGISLATION CITED:	Retail Leases Act 1994 Bankruptcy Act 1966 (Cth) Supreme Court Rules 1970
CASES CITED:	Cummings v Claremont Petroleum NL (1995-1996) 185 CLR 124 Cole v Challenge Bank Ltd [2002] FCAFC 200
PARTIES:	Harry Voskuilen - Plaintiff Morisset Mega Market - Plaintiff
FILE NUMBER(S):	SC 1258/02
COUNSEL:	Plaintiff - No appearance Defendant - Mr T W Marskell
SOLICITORS:	Clayton Utz Lawyers - Defendant

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

WEDNESDAY 2 FEBRUARY 2005

1258/02 HENRICUS GERARDUS VOSKUILEN v MORISSET MEGA-MARKET PTY LTD

EX TEMPORE JUDGMENT

1 The plaintiff in these proceedings, Henricus Gerardus Voskuilen, commenced proceedings against the defendant Morisset Mega-Market Pty Ltd in 2002.

2 The statement of claim alleged that Mega-Market had licensed to Mr Voskuilen stalls in its market and then refused him access to the stalls, contrary to the Retail Leases Act 1994. There was a claim for damages.

3 The matter was set down for trial before me, commencing today. On 24 September 2004, Mr Voskuilen was declared bankrupt. His estate then vested in the Official Trustee under the Bankruptcy Act 1966 (Cth), s 58. That included the cause of action in these proceedings (Cummings v Claremont Petroleum NL (1995-1996) 185 CLR 124).

4 The Bankruptcy Act 1966 (Cth), s 60(2) and s 60(3) are in the following terms:

“(2) An action commenced by a person who subsequently becomes a bankrupt is, upon his 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 by a defendant or other party to the action, he shall be deemed to have abandoned the action.”

5 The Official Trustee was informed of the proceedings and his attention drawn to those provisions by a letter from the solicitor for Mega-Market dated 29 October 2004. In a response of 2 November 2004, the Official Trustee acknowledged his understanding that the proceedings had been stayed in accordance with the Bankruptcy Act 1966 (Cth), s 60(2) and that he should make an election under s 60(3). No election was made in that letter.

6 The solicitors for Mega-Market wrote again on 22 December 2004 stating that since more than 28 days had elapsed since their letter of 29 October 2004, the proceedings were deemed to have been abandoned. Nonetheless, the solicitors informed the Official Trustee that the matter was set down for hearing and sought advice by 23 December 2004 whether he would agree that the parties approach me to advise that the proceedings had been abandoned and to seek a vacation of the hearing date. No response was received to that letter.

7 On 12 January 2005, the solicitors for Mega-Market wrote again repeating their request for the Official Trustee’s agreement by 21 January 2005 for the parties to approach me to indicate that the proceedings should be dismissed and Mr Voskuilen should pay the costs. On 14 January 2005, the Official Trustee responded in these terms:

"The Official Trustee in bankruptcy is not a party to the Supreme Court proceedings. Without wishing any discourtesy to Justice Gzell of the Supreme Court of New South Wales, the Official Trustee in Bankruptcy will leave it to your firm to deal with the matter in the manner which may be required by either the Supreme Court Rules or Justice Gzell.
The Official Trustee in Bankruptcy does not propose to participate in Supreme Court proceeding number 1258 of 2002.”

8 When the case was called this morning, there was no appearance for the Official Trustee or Mr Voskuilen. I gave Mega-Market leave to file in court a notice of motion seeking orders that the proceedings be dismissed, Mr Voskuilen pay its costs or, alternatively, the costs of the proceedings be paid from Mr Voskuilen’s estate in bankruptcy.

9 It is clear from the Bankruptcy Act 1966 (Cth), s 58, s 60(2) and s 60(3) that Mr Voskuilen’s interest in the proceedings is spent. In light of the correspondence, it is also clear that the Official Trustee did not intend to appear at the hearing. In those circumstances it is appropriate for me to order that the notice of motion be heard instanter and to dispense with its service upon the Official Trustee, and I do so.

10 In Cole v Challenge Bank Ltd [2002] FCAFC 200 a Full Court of the Federal Court had a similar matter to consider except that the proceeding in question was an appeal. The respondents, by notice of motion, sought an order that the appeal be dismissed and that the appellant pay the respondents’ costs of the motion and of the appeal.

11 The trustee in bankruptcy had been referred to the above legislation and had, in the course of correspondence, stated:

“As previously stated, the trustee in bankruptcy does not intend to pursue the current appeal in the Federal Court. If you apply to a judge to have the appeal dismissed then the trustee does not intend to oppose your application or to appear at the hearing. As you are aware, the trustee is not a party to the proceedings.”

12 Of that communication, in particular, Gray J said at [14]:

“In my view, the preferable construction of the correspondence is that the trustee in bankruptcy has made an election in writing to discontinue the appeal.”

In the alternative, his Honour took the view that the effect of the Bankruptcy Act 1966 (Cth) s 60(3) was that the trustee had been deemed to have abandoned the appeal.

13 Emmett J said this at [22]:

“The trustee in bankruptcy is the person in whom this appeal is presently vested. The trustee has evinced a clear intention not to prosecute the appeal, whether by way of discontinuance or abandonment does not much matter. I would be inclined to agree with my brother Nicholson that the correspondence evinces an intention to allow the appeal to be abandoned pursuant to s 60(3). There has been no appearance from the appellants. It is clear, in the absence of any formal step, either by the appellants or the trustee in bankruptcy, to dispose of the appeal, that some step has to be taken to dispose formally of the appeal.”

14 I take a similar view to the correspondence in this case. In my view it constituted an election by the Official Trustee to abandon the proceedings and, if not, the Official Trustee is deemed to have abandoned the proceedings under the Bankruptcy Act 1966 (Cth) s 60(3) at the expiration of 28 days from the first letter from Mega-Market’s solicitors. It is appropriate, therefore, that I make an order that the proceedings be dismissed, which I do.

15 In Cole at [16], Gray J considered that costs should follow the event by analogy to costs following the event if a notice of discontinuance were filed:

“The question is whether, in these circumstances, there should be an order for costs in favour of the respondents. Two issues arise in relation to costs, one as to the costs of the appeal, the other as to the costs of the motion. Ordinarily, if an appeal is discontinued, costs follow the event. If an appeal were to be abandoned in normal circumstances by express statement of the appellant, it would be open to a respondent to put an end to it by moving the Court to have the appeal dismissed for want of prosecution. In those circumstances, costs would still follow the event and an order would be made against the appellant in respect of those costs. Such costs would, of course, include the costs of moving the Court to dismiss the appeal for want of prosecution.”

He proposed that orders for costs of the appeal and of the motion be made in favour of both respondents. The other members of the court agreed.

16 Similar considerations apply in this court. If a plaintiff seeks leave to discontinue under the Supreme Court Rules 1970, Pt 21 r 2(b), other parties have the opportunity to seek an order for costs on the basis that they should follow the event. If a plaintiff discontinues with the consent of all other parties under Pt 21 r 2(a) then, unless the notice contains a statement under Pt 21 r 5(3) that no order will be sought as to costs or unless the court otherwise orders, the plaintiff must pay the costs of the defence under Pt 51A r 21.

17 In the instant case the Official Trustee did not seek leave to discontinue the proceedings and, in order to bring the matter to an end, Mega-Market was forced to take the step of moving the court to dismiss the proceedings.

18 There may be other creditors who have a call upon the estate of Mr Voskuilen. I do not think it appropriate to make an order that the costs of the proceedings be paid out of that estate.

19 I order Mr Voskuilen to pay Mega-Market’s costs of the proceedings and the costs of the motion.

20 Material was tendered before me demonstrating that Mr Voskuilen has sought to raise this dispute before on material that was struck out by the court. The material also reveals that he has been bankrupted on previous occasions.

21 I have been asked to make an order that Mr Voskuilen be restrained from commencing any other proceedings dealing with the issues identified in his statement of claim in these proceedings without the leave of the court unless he has paid the costs the subject of these orders. In the circumstances, I make such an order.

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