(5) Nothing in this section affects the provisions of Division 3 of Part 3 of the Land and Environment Court Act 1979 ."
7 Pain J refused to make the orders sought in paras (3), (4(a)), (6) and (7) of the notice of motion, first, on the basis that s 124 did not provide for the making of such orders and alternatively, if such orders could be made, then she would refuse to do so in the exercise of her discretion: Baulkham Hills Shire Council v Stankovic (No 3) [2008] NSWLEC 266.
8 The present appeal is against her Honour orders. It was instituted prior to Mr Stankovic's bankruptcy, which was made on the Council's petition based upon the non-payment of the costs that he was ordered to pay in the Council's favour in the Land and Environment Court proceedings. Those costs have now been paid and Mr Stankovic has applied for the annulment of the bankruptcy. It appears there is at least one other creditor. The value of Mr and Mrs Stankovic's property is substantial and it appears that Mr Stankovic's assets exceed his liabilities to a significant extent. What relevance that has to his application to annul the bankruptcy is not for this Court to determine.
9 Upon becoming bankrupt, a bankrupt's property vests in the bankrupt's Trustee in Bankruptcy: see the Bankruptcy Act, s 5, s 58 and s 116. Mr Stankovic accepts that his interest in the land and most, if not all the goods on the land, have vested in his Trustee.
10 The Bankruptcy Act, s 60(2) provides that proceedings commenced by a person who subsequently becomes a bankrupt are stayed. This does not apply to the appeal, as Mr Stankovic is a respondent to the appeal (and was a respondent in the Land and Environment Court). The Council contended, however, that Mr Stankovic has no interest in the proceedings, because he has no interest in the land and goods that are the subject of the proceedings. Having no interest in the proceedings, the Council contended that Mr Stankovic had no right to appear on the hearing of the appeal: see Farrow Mortgage Services Pty Ltd v Winfield (1992) 2 QdR 282; Re-Engine Pty Ltd v Fergusson [2007] VSC 57; and Bendigo Bank Ltd v Demaria [2001] VSC 218.
11 However, Farrow Mortgage Services and Bendigo Bank v Demaria were both possession cases and the land in both was, therefore, the subject matter of the proceedings. In this case, the subject matter of the appeal is not the land, nor was the land the subject matter of the s 124 proceedings or the earlier unlawful use proceedings. In the earlier proceedings, the matter in issue was whether Mr Stankovic was using the land in breach of the Environmental Planning and Assessment Act. The orders made were personal to him. The s 124 proceedings were directed to enforcing the orders made by the Court against Mr and Mrs Stankovic.
12 Re Engine involved a claim for breach of fiduciary duty. After a review of the authorities, including Cummings v Claremont Petroleum [1996] HCA 19; (1996) 185 CLR 124 to which I refer below, Dodd-Stretton J granted leave for the bankrupt defendants to appear. I do not propose to deal with the reasoning of his Honour in that case, but rather will consider the principles stated by the High Court in Cummings.
13 Senior counsel for the Council submitted that Cummings was authority for the proposition that Mr Stankovic had no right to appear. Cummings does not stand for that proposition. Rather, it is authority for the proposition that insofar as a judgment against a bankrupt results in a judgment debt provable in the bankruptcy, the bankrupt does not have a financial interest in the appeal so as to confer locus standi to appeal in his or her own name against the judgment. The majority, Brennan CJ, Gaudron and McHugh JJ, rejected the proposition that a right to appeal was property of the bankrupt so as itself to be vested in the trustee.
14 The orders sought under s 124 had a connection with the land and goods, as the Council sought orders permitting it to enter the land and remove the goods. However, the land and goods did not thereby become the subject matter of the appeal. The subject matter of the appeal is the Council's entitlement to orders under s 124. The Land and Environment Court proceedings, properly classified, were enforcement proceedings. It cannot be said that the property of the bankrupt, now vested in the Trustee, was the subject matter of the proceedings.
15 Further, Mr Stankovic is a respondent to the appeal. He has not brought the appeal. He does not need the leave of the court administering the Bankruptcy Act to stay in the litigation. There is no suggestion that his Trustee proposes to defend his interests on the appeal, or even that the Trustee would have any such right to do so. Contrary to the Council's contention, Mr Stankovic has an interest in the proceedings and is the proper contradictor to the Council's contention that it could use the processes specified under s 124 to, in effect, enforce orders made by the Land and Environment Court personally against Mr Stankovic. Even if Mr Stankovic is not entitled as of right to appear as a party in the appeal, I would grant him leave to do so for the reason that he is a proper contradictor to the appeal.
16 The Council's application to adjourn the proceedings was made late. It did not commence to seek a resolution of the appeal until late July, more than two months after the bankruptcy and only approximately a month before the appeal. The first meeting of the Council, the Trustee and Mrs Stankovic did not take place until a fortnight before the date set for the hearing of the appeal.
17 Mr Stankovic was not included in those discussions. Notwithstanding that the Council contended that Mr Stankovic has no right to appear on the appeal or no interest such that he should not be given leave to appear, it took no action to remove him from the proceedings or have his appearance made subject to any terms, such as that he bear his own costs. In any event, for the reasons I have given, I consider that Mr Stankovic has a right to appear on the appeal. He should, therefore, have the costs thrown away by the adjournment including the costs of the notice of motion and the costs of the written submissions relating to the issues subject of this judgment.
18 Mr Stankovic submitted that if an adjournment was granted, it should be on terms that the Council be restrained from removing and selling chattels on the land and be restrained from removing or selling chattels on the land during the continuation of the adjournment and without further order of the Court: see the Uniform Civil Procedure Rules 2005, r 25.3.
19 I would not make that order. The property and goods on it are vested in the Trustee. The Trustee has power to deal with those assets under the Bankruptcy Act. I have no evidence or even information as to what matters are presently under negotiation amongst the Council, the Trustee and Mrs Stankovic. However, I consider that I should proceed on the assumption that whatever is being negotiated, the intended outcome is one in which the Trustee is authorised to engage.
20 The orders of the Court are: