Mr Anderson was the tenant and the respondent Mr Armitage the landlord of residential premises in Darlinghurst. A residential tenancy agreement entered into which provided that the period of the tenancy would be one year, starting on 14 October 2013 and ending on 13 October 2014. The rent was $2,900 per fortnight.
There were problems with the air conditioning of the apartment. Eventually on 10 April 2015 Mr Anderson commenced proceedings seeking an order for compensation. Those proceedings were dismissed by the Tribunal on 21 August 2014.
Meanwhile, Mr Anderson sought to extend the term of the tenancy. He alleged that there was an oral agreement that he could extend the term of the residential tenancy agreement by an additional 52 weeks.
The landlord denied any oral agreement and on 8 September 2014 Mr Anderson commenced proceedings RT 14/44291. He sought the following orders
1. an order pursuant to s 187(1)(a) of the Residential Tenancies Act 2010 (RT Act) restraining any action in breach of a residential tenancy agreement;
2. an order pursuant to s 187(1)(b) of the RT Act requiring an action in performance of a residential tenancy agreement;
3. an order pursuant to s 186 of the RT Act that the landlord prepare and enter into a written residential tenancy agreement; and
4. an order pursuant to s 115 of the RT Act that the termination notice served by Mr Armitgage had no effect because it was a retaliatory notice.
In his application filed with the Tribunal Mr Anderson stated:
I entered into the lease of the property on 14 October solely because the managing agent assured me that I would be able to extend the term of the lease upon request. This assurance by the managing agent was provided both prior to and at the time of entering the lease. In early August 2014 I requested the managing agent to extend the lease by a further 12 months as I was intending to travel overseas and may not be back in Australia for several months.
Mr Anderson alleged that there was an oral term to the agreement which provided:
Notwithstanding anything else contained herein, the tenant may extend the term of this agreement for an additional 52 weeks, commencing from 14 October 2014, by oral and/or written notice to the agent of their intentions to extend, given a reasonable time before the expiry of the existing term of the agreement but any event not later than 30 September 2014. On such notice being given, the term of the lease shall be extended for an additional period of 12 months expiring on 13 October 2015.
On 15 October 2014 Mr Armitage filed his own application, proceedings RT 14/50208. He had sent a notice of termination of the residential tenancy agreement to Mr Anderson on 13 August 2014. The notice gave notice of termination pursuant to s 84 of the RT Act (that is the end of the fixed term of the agreement), and sought vacant possession of the property by 14 October 2014. Vacant possession was not given as requested.
Both Mr Anderson's application and Mr Armitage's application were heard on 11 November 2014. In Mr Armitage's application the Tribunal ordered that the residential tenancy agreement was terminated immediately, that Mr Anderson give possession to Mr Armitage, but that the order be suspended until 2 December 2014 on condition that Mr Anderson pay Mr Armitage an occupation fee of $207.14 per day.
Mr Anderson's application was dismissed. In summary the Tribunal preferred the evidence of the landlord's agent to that of Mr Anderson and his wife. In written reasons (the Reasons) the Tribunal relevantly stated:
Both parties were permitted to state their respective cases. In making a determination of disputed factual matters, the Tribunal was required to assess and evaluate the parties' competing versions of the relevant events during 2013 and 2014 and then to decide the reliability of the evidence of the tenant, his wife, the landlord and the landlord's agent. The Tribunal took account of the demeanour of those witnesses, the credibility of their answers when addressing questions of the Tribunal or the questions or counter statements of the other party, and the extent to which contemporaneous documents (such as emails) substantiate or detract from one or other party's version of events.
While the detail of each piece of evidence may not be specifically referred to in these Reasons, the Tribunal has reached this decision following due and careful consideration of all of the evidence presented (both sworn oral evidence and documents produced pursuant to the procedural directions) as well as the submissions made by the parties at the formal hearing.
The parties presented conflicting evidence as to what was said in respect of any option to renew the tenancy agreement. The tenant relied on the affidavits of Mr and Mrs Anderson and other surrounding circumstances including that the tenant (having endured the inconvenience of two shorter term tenancies immediately prior to October 2013) was anxious to secure a tenancy of at least 2 years.
On the other hand, the landlord denies any agreement for an option to renew. The landlord's agent says there was never any guarantee that the tenancy agreement would be extended beyond 52 weeks; only that both parties agreed on 11 October 2013 with the express words in the written agreement of 52 weeks because this afforded them 'flexibility' and an 'ability to consider their options at the end of the 52 weeks including whether there would be a further term of 52 weeks. The landlord also submitted the subsequent conduct of the parties (including emails sent in February 2014) is consistent with the position that there was no consensus ad idem or 'meeting of minds' in relation to any option to renew at the end of 52 weeks.
The Tribunal prefers the landlord's evidence as to what was said at the time of the written agreement was signed. The tenant's version of events is unsupported by any contemporaneous record. Therefore the Tribunal finds that there is no additional (oral) terms in the residential tenancy agreement as regards an option to renew as alleged by the tenant.
As the Tribunal found that there was no term granting the Mr Anderson (what the Tribunal described as) an option to renew, the Tribunal further found that it could not be said that the landlord was being retaliatory in insisting on termination at the end of the fixed term (that is 13 October 2014). The Tribunal also accepted the landlord's evidence that he needed the premises for his own personal use due a change in personal circumstances.
It is from those decisions and reasons that Mr Anderson now seeks leave to appeal.
[2]
Grounds of Appeal
Mr Anderson states his grounds of appeal as follows:
1. The decision of the Tribunal under appeal was not fair and equitable.
2. The decision of the Tribunal under appeal was against the weight of the evidence.
These grounds were amplified in the written submissions of 27 February 2015. Mr Anderson submits that the decision was not fair and equitable because it (a) failed to give sufficient weight to relevant evidence (b) gave excessive weight to irrelevant evidence (c) reached conclusions inconsistent with the weight of the evidence, and (d) failed to make a finding that retaliatory action had occurred.
As to (a), Mr Anderson submits that the decision failed to give weight to discussions between Mrs Anderson and the landlord's agent on 5 October 2013, and to the conversation between Mr Anderson and the agent's agent on 11 October 2013. It is correct that neither conversation was specifically referred to by the Tribunal. However the reasons state that due and careful consideration was made of all of the evidence presented.
As to (b) Mr Anderson submits that the Tribunal placed too much weight on the lack of contemporaneous records supporting the alleged oral term, and ignored uncontested evidence of the surrounding circumstances which supported an objective finding that the oral agreement was reached. Again, it is correct that the Reasons do refer specifically to the lack of contemporaneous records, but, again, we note that the underlined passage of the Reasons state that due and careful consideration was made of all of the evidence presented.
As to (c), Mr Anderson submits, in particular:
that his and his wife's version of events was supported by sworn affidavit evidence, whereas the landlord's evidence was not supported by any affidavit evidence;
Mr and Mrs Anderson were not cross examined;
the agent's oral evidence was vague, unreliable and inherently unreliable;
the member asked the tenants to explain "everything" and the agent was not asked to elaborate;
the agent was evasive and read from a pre-prepared sheet; her inability to answer questions should have lead the member to prefer the Anderson's evidence;
Ms Costello did not have a clear recollection who attended the inspection and it must follow that she could not have a clear recollection of the conversations that took place;
The agent notified the tenant that she was not considering an extension of the term and on the same evening served a notice of termination on the tenant.
In our view it matters not whether evidence is given orally or by affidavit. What matters is the reliability of the evidence, its testing, and its ultimate acceptance or rejection by the Tribunal of fact. Here, in careful and detailed reasons, the Tribunal set out its reasoning for preferring the evidence relied by the tenant to that relied on by the landlord.
[3]
Principles to be applied
The relevant provision appears in Schedule 4, clause 12 of the Act. That clause relevantly states that an Appeal Panel may grant leave only if the appeal panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:
1. the decision of the Tribunal under appeal was not fair and equitable, or
2. the decision of the Tribunal under appeal was against the weight of evidence.
We note that in Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarized at [71] and [79] as follows:
[71] . . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . .
[79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred."
The Appeal Panel then stated:
77. As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that:
(1) If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12].
(2) The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153].
78. If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence.
The Appeal Panel then stated the principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted. After a review of the relevant cases at [65]-[79] the Appeal Panel concluded at [84]:
84. The general principles derived from these cases can be summarised as follows:
(1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];
(2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
[4]
Consideration
In essence, Mr Anderson submits that the decision appealed from was not fair and equitable because it was against the weight of the evidence.
In considering whether the decision under appeal can be said to be "against the weight of evidence", it is instructive to examine the two cases referred to by the Appeal Panel in Collins v Urban at par [77(2)] above. The first is the decision of the High Court of Australia in Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41:
The correct principle is that a court of appeal may order a new trial if the jury has reached a conclusion which is against the evidence in the sense that the evidence in its totality preponderates so strongly against the conclusion favoured by the jury that it can be said that the verdict is such as reasonable jurors could not reach."
We also found helpful the observations of the Court of Appeal in Snedden v Nationwide News Pty Ltd [2011] NSWCA 262 at [33]:
The role of an appellate court when reviewing findings of fact was authoritatively determined by the High Court in Warren v Coombes [1979] HCA 9; (1978-1979) 142 CLR 531 and further discussed in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118. A judge sitting without a jury is to determine the primary facts and any relevant inferences arising from them. An appellate court, which has not seen or heard the witnesses, has a more confined role. Although, when the issue is raised, its duty is to determine the facts for itself it must pay due regard to the opportunity afforded to the trial judge to observe the witnesses and may intervene to correct error where it is satisfied that a finding of primary fact made by the trial judge was not open or where it is persuaded that an inference drawn by the primary judge is wrong.
We also note the observations of Spigelman CJ in Waverley Municipal Council v Swain [2003] NSWCA 61:
13 Perhaps the most frequently cited reference to the meaning of this ground of appeal is that of Latham CJ in Hocking v Bell at 440-441 where his Honour said:
"If a verdict is against evidence and the weight of evidence a new trial may be ordered. If the evidence on one side so greatly preponderates over the evidence on the other side that it can be said that the verdict is such as reasonable jurors, understanding their responsibility, could not reach, a verdict may be set aside and a new trial may be ordered. Caution is necessary in applying the principle where the verdict may be set aside if it is against evidence and the weight of evidence. That principle must not be interpreted in such a manner as to deprive the jury of its right of believing one witness on one side against twenty (or any number) of witnesses on the other side."
14 Another formulation of this ground of appeal is that of Jordan CJ in Bell v Thompson (1934) 34 SR (NSW) 431 at 437:
"Where there is evidence both ways - i.e., evidence that the fact does, and also that it does not exist - in order to justify a new trial on the ground that the verdict is against the weight of evidence, it is necessary not merely that the evidence should, in the opinion of the Court, preponderate in favour of the unsuccessful party, but that it should so strongly preponderate in his favour as to lead to the conclusion that the jury, in finding for the other party, have either wilfully disregarded the evidence or failed to understand and appreciate it ...
The test Mr Anderson needs to satisfy is whether the evidence so strongly preponderates in his favour as to lead to the conclusion that the Tribunal in finding for Mr Armitage, either wilfully disregarded the evidence or failed to understand and appreciate it.
As the Reasons reflect that:
both parties were permitted to state their respective arguments;
the Tribunal assessed and evaluated the parties' competing versions of the relevant events during 2013 and 2014;
the Tribunal determined the reliability of the evidence of the parties and the witnesses;
the Tribunal took into account of the demeanour of those witnesses;
the Tribunal took into account of the extent to which contemporaneous documents (such as emails) substantiated or detracted from one or other party's version of events.
the Tribunal reached its decision following careful consideration of all of the evidence presented (both sworn oral evidence and documents produced pursuant to the procedural directions) as well as the submissions made by the parties at the formal hearing,
we are not persuaded that the decision reached is against the weight of the evidence in the sense that the evidence in its totality preponderates so strongly against that conclusion.
[5]
Did the Tribunal err in not declaring the 13 August 2014 notice retaliatory?
Mr Anderson also submits that the decision appealed from was not fair and equitable because the Tribunal failed to make a finding that retaliatory action had occurred.
Section 115 of the RT Act provides:
(1) The Tribunal may, on application by a tenant or when considering an application for a termination order or in relation to a termination notice:
(a) declare that a termination notice has no effect, or
(b) refuse to make a termination order,
if it is satisfied that a termination notice given or application made by the landlord was a retaliatory notice or a retaliatory application.
(2) The Tribunal may find that a termination notice is a retaliatory notice or that an application is a retaliatory application if it is satisfied that the landlord was wholly or partly motivated to give the notice or make the application for any of the following reasons:
(a) the tenant had applied or proposed to apply to the Tribunal for an order,
(b) the tenant had taken or proposed to take any other action to enforce a right of the tenant under the residential tenancy agreement, this Act or any other law,
(c) an order of the Tribunal was in force in relation to the landlord and tenant.
The Tribunal concluded that, given its finding that there was no term providing an option to renew the residential tenancy agreement, it could not be said that the landlord was being retaliatory in insisting on termination of the tenancy at the end of the fixed term. The Tribunal also accepted the landlord's evidence that he required the premises for his own personal use due to a change in his family's circumstances.
The tenant submits that the notice of termination for end of fixed term should be declared retaliatory. He submits that the decision made by Tribunal was against the weight of the evidence before it, because:
1. an email was sent by the agent to the tenant threatening the tenant for termination for non-payment of rent;
2. a conversation between agent and landlord on 12 August 2014 should have confirmed to the agent that the tenant was asserting a right;
3. the landlord's change in family circumstances as a reason to end the tenancy was unconvincing.
Again, the test Mr Anderson needs to satisfy is whether the evidence so strongly preponderates in his favour as to lead to the conclusion that the Tribunal in finding for Mr Armitage, either wilfully disregarded the evidence or failed to understand and appreciate it.
As we noted above, the Tribunal's reasons reflected the Tribunal's assessment and evaluation of the parties' competing versions of the relevant events, assessed the reliability of their evidence, and took into account their demeanour. The Tribunal made a clear finding that it accepted the landlord's evidence, in particular that he required the premises for his own personal use. In those circumstances we are not persuaded that the decision reached is against the weight of the evidence in the sense that the evidence in its totality preponderates so strongly against that conclusion.
[6]
Other issues - Further stay
In the appellant's written submissions dealing with the effect of his bankruptcy he requests, in the event that his submissions are not accepted, a "short stay" to allow him to consider whether he should apply to the Federal Circuit Court in respect of the trustee's actions, pursuant to s 178 of the Bankruptcy Act.
We note that the letter Exhibit A was dated 18 February 2015. It was addressed to the appellant's solicitors. We consider that the appellant has had ample to time in which to consider whether or not to seek relief in respect of the trustee's decision. Given that consideration, and this decision that the appeal should be dismissed, we consider that the existing stay on the operation of the decision of 11 November 2014 should be revoked.
In any event, even if the trustee now decided to change its decision and elect to continue the appellant's appeal, for the reasons we have given dealing with the substance of the appeal and refusing leave to appeal, any action by the trustee to prosecute the appeal may be unlikely to succeed. In those circumstances we consider that the present stay should not be extended and should be revoked.
[7]
Orders
For the above reasons, we make the following orders:
1. The appeal is deemed abandoned by operation of s 60(3) of the Bankruptcy Act 1966 (Cth), and is otherwise dismissed.
2. The stay of the orders of 11 November 2014 in proceedings RT RT 14/44291 and RT 14/50202 is revoked.
[8]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 01 May 2015
Section 60 of the Bankruptcy Act relevantly provides:
(2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her 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 or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
(4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of:
(a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or
(b) the death of his or her spouse or de facto partner or of a member of his or her family.
The appeal was filed on 21 November 2014. It is common ground that the appellant became bankrupt on 4 February 2015.
At the commencement of the hearing the Appeal Panel asked Mr D'Arville to explain the position. Initially Mr d'Arville indicated that he was instructed that the trustee in bankruptcy had consented to carrying on the appeal. However, Mr Armitage objected to this statement, and tendered a letter from the trustee's solicitors JHK Legal dated 18 February 2015 (Exhibit A). That letter relevantly stated:
Our client has advised that he is not willing to sell/assign the Bankrupt's chose of action in the NCAT Proceedings, as such our client will not be making an election in respect of the NCAT proceedings pursuant to section 60(3) of the Bankruptcy Act 1966 ("the Act").
As such the Bankrupt can take steps to continue the action pursuant to section 60(4) of the Act subject to any opposition from the defendant/respondent in the NCAT proceedings.
We reserve the Trustee's rights in all respects.
As the content of that letter seemed at odds with what counsel had indicated to the Appeal Panel, we thought it appropriate to adjourn for a short period to allow Mr d'Arville to seek further instructions. After that adjournment Mr d'Arville submitted that the appeal being pursued by his client fell within the exception provided for in s 60(4) of the Bankruptcy Act.
In this respect Mr d'Arville relied on Owens v Comlaw (No. 62) Pty Ltd [2006] VSCA 151 at [26], and a decision of the Federal Court of Australia referred to in that decision, Griffiths v Civil Aviation Authority [1996] FCA 1502. Given that the respondent was unrepresented, and also given that the appellant wished to file submissions on this issue, we considered the appropriate course was to allowed each party a short period in which to file submissions addressing this issue. In the meantime the Appeal Panel heard the application for leave to appeal.
Submissions were subsequently received by the Registry from the appellant on 16 March 2015 and the respondent on 17 March 2015.
The appellant relied on passages from Owens v Comlaw (No. 62) Pty Ltd [2006] VSCA 151, Griffiths v Civil Aviation Authority [1996] FCA 1502 and Daemar v Industrial Commission of New South Wales (1988) NSWLR 45.
The kernel of the appellant's argument is the following passage from Griffiths:
Nor is the Act concerned to prevent the bankrupt enforcing rights which are personal to the bankrupt and irrelevant to the attainment of the [Bankruptcy] Act. In consequence, a construction of the Act which denies to a bankrupt the enjoyment of rights which does not affect the value of the bankrupt's estate or the administration of the estate is to be avoided.
. . . in my view, it was not the intention of Parliament in passing s 60(4) and s 116(2)(g) nor the predecessors of these sections, to state exhaustively the exceptions to the property in the nature of rights of action which would not pass to the trustee and thereby to identify by omission all other rights of "property" within s 5 of the Act.
Claims by or against the bankrupt which do not affect the administration of the estate of the bankrupt in any way or interfere in the due administration of it are of no interest to the trustee.
Thus Mr D'Arville submitted that the appeal of the appellant is a claim by a bankrupt which does "not affect the estate in any way", and for that reason "is of no interest to the trustee". Mr D'Arville submitted:
11 The proceedings will determine whether the bankrupt [appellant] continues to pay rent to the [the respondent] Mr Armitage. This may be thought to impact the estate. However, a bankruptcy trustee is always allowed to make an allowance out of the estate covering living expense (including rent): see section 134(ma) Bankruptcy Act. The bankruptcy trustee maintains control of the allowance that is provided to [the appellant] Mr Anderson, so the proceedings do not impact on the estate.
. . .
14 The Appellant submits that the present appeal relates only to [the appellant's] right of occupation in the current premises. The right of action is a right to stay in the property. Whether [the appellant] wins or loses, there is no pecuniary loss to the property of estate of the bankrupt. As set out above, the bankruptcy trustee retains control of the allowance to the bankrupt for matters such as rent.
Consideration
The meaning of s 60 of the Bankruptcy Act has been considered in a series of cases. In Faulkner v Bluett [1981] FCA 3 Lockhart J stated:
[19] . . . Although rights of action generally pass to the trustee of a bankrupt's estate, exceptions have been created by decisions of the courts, including the following: a right of action for slander, Ex parte Vine; Re Wilson (1878) 8 Ch D 364. ; for seduction of a servant, Howard v. Crowther [1841] EngR 770; (1841) 8 M & W 601; 151 ER 1179. ; for trespass to land or goods in the plaintiff's actual possession, at least where the only substantial damage is for the annoyance and personal inconvenience to him, Clark v. Calvet [1819] EngR 273; (1819) 8 Taunt 742; 129 ER 573. and Rose v. Buckett (1901) 2 KB 449.; for breach after bankruptcy of a contract for personal service made before bankruptcy, Bailey v. Thurston & Co. Ltd. (1903) 1 KB 137. ; for personal injuries arising out of certain breaches of contract such as a contract of marriage, Drake v. Beckham [1843] EngR 325; (1843) 11 M & W 315; 152 ER 823.
[20] The common thread running through these cases is that where the primary and substantial right of action is direct pecuniary loss to the property or estate of the bankrupt, the right to sue passes to the trustee notwithstanding that it may have produced personal inconvenience to the bankrupt . . . Where the essential cause of action is the personal injury done to the person or feelings of the bankrupt the right to sue remains with the bankrupt.
In Cox v Journeaux (No 2) [1935] HCA 48 Dixon J considered s 62(3) of the Bankruptcy Act 1924-1933. Section 62(3) is an analogue provision of s 60. His Honour stated:
He is a bankrupt and there is no prospect of his satisfying any order for costs made against him in this, or as I infer, in previous litigation. Notice was given under sec. 63 (3) of the Bankruptcy Act 1924-1933 to the official receiver requiring him to elect to prosecute or discontinue the action and he has elected not to prosecute it. The plaintiff says that he himself is entitled to prosecute it under the proviso as an action for personal injury or wrong done to himself. The test 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 (Wilson v. United Counties Bank Ltd [[1920] A.C. 102, at pp. 111 and 128-133].
The reference by Dixon J to "immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property" is, in turn, a reference to the decision of Erle J in Beckham v Drake [1849] EngR 843; (1849) 2 HLC 579; 9 ER 1213:
The right of action does not pass where the damages are to be estimated by immediate reference to pain felt by the bankrupt in respect of his body, mind, or character, and without immediate reference to his rights or property. Thus it has been laid down that assignees cannot sue for breach of promise of marriage, for criminal conversion, seduction, defamation, battery, injury to the person by negligence, as by not carrying safely, not curing, not having from imprisonment by process of law.
That passage was referred to as "oft-cited" by Lockhart J in Faulkner and as "seminal" by Allsop P in Moss v Eaglestone [2011] NSWCA 404. In Moss Allsop P conducted a lengthy review of the history of the section and the meaning of s 60. The learned President concludes at [64 ff]:
Thus, when one comes to the words of ss 60(4) and 116(2)(g) it is to be recognised that the background and context are, through various Colonial and State, and later Commonwealth provisions, reflective of, and embodying, the notions within the common law of bankruptcy. That assists in appreciating that the distinction (in ss 60(4) and 116(2)(g)) between person and property is a substantive one. It was a distinction made by courts and judges of the highest authority who declared it to be unjust and harsh that the estate of the bankrupt and the participating creditors should be swelled and advantaged by a wrong to the person or reputation of the bankrupt.
These comments relating to inappropriate benefit to the estate are, in our view, equally apposite to actions which cause detriment to the estate; just as it is inappropriate that the bankrupt's estate profit by receiving damages claims otherwise due to the bankrupt, it is also inappropriate that the estate now administered by the trustee be dissipated by a bankrupt continuing to incur expenses otherwise payable at the discretion of the trustee. This appeal ultimately involves the right of the appellant to occupy premises and incurring an obligation to pay rent of $2,900 per fortnight. The trustee has elected not to continue the appeal. Whether the trustee provides an allowance pursuant to s 134(ma) of the Bankruptcy Act out of the estate as he or she thinks just to cover the appellant's living expenses is a matter for the trustee.
Allsop P concludes at [65]:
The terms of ss 60(4) (and 116(2)(g)) reflect that distinction of substance. The words "action commenced by him or her ... in respect of any personal injury or wrong done to [him or her]" require the substance of the matter to be examined.
Mr Anderson concedes (at [10] of his submissions) that "the issue" in the proceedings is "about property". The substantive matter appealed from by the appellant involves the terms of a residential tenancy agreement between him and the respondent. That agreement gives the appellant the right to occupy premises and the obligation to pay rent. In our view that obligation to pay rent must affect the estate of the bankrupt appellant.
That, we consider, is the end of the debate. We see no substance in the submission that the appeal falls with in s 60(4) of the Bankruptcy Act (relevantly paragraph (a), namely a personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family) or otherwise falls within the exhaustive description of such matters which would fall within the purview of s 60(4) (or equivalent sections) given by Earle J as long ago as 1849.
While the appellant is correct in submitting that Griffiths suggests that neither s 60(4) and s 116(2)(g) nor their predecessor sections state exhaustively the exceptions to the rights of action which would not pass to the trustee, this does not appear to have been adopted or applied in subsequent decisions. The appellant's counsel does not refer to any authority which expands the meaning of the section in the way he contends. The Appeal Panel should be slow to do so. As Allsop P noted in Moss at [77], in discussing the position of a bankrupt who sought to sue on indivisible causes of action in tort and contract:
It remains for another occasion to explore how far cases such as these should be taken to deny a bankrupt a substantive claim for non-pecuniary and personal damage which would otherwise fall within the description of the consequence of "personal injury or wrong".
While his Honour was referring to indivisible causes of action, his remarks of caution are apposite here.
There is one remaining submission of the appellant to consider. That is the appellant's submission that the "fundamental" reason that a bankrupt's proceedings are stayed upon bankruptcy is that the other party will be prejudiced if he or she wins the case, as he or she will not be able to recover costs. The appellant submits that in the "generally" no cost jurisdiction of NCAT that principle has no application. We disagree. If there is a fundamental reason why the bankrupt's proceedings are stayed, it is to allow the trustee in bankruptcy the opportunity to elect whether or not to continue any action commenced by the bankrupt. As to the costs rule argument, a party before the Appeal Panel may obtain their costs in "special circumstances": s 60 of the Act. Section 60(3)(g) permits the Appeal Panel to take into account any matter it considers relevant in exercising its discretion whether or not to award costs.
In conclusion, we do not find that the cause of action, the appeal, is an action of the kind that falls within s 60(4) of the Bankruptcy Act. As the trustee in bankruptcy has not elected to exercise their right to prosecute or the appeal, the action is deemed to be abandoned.
The appeal should therefore be dismissed.
If we are wrong in our conclusion about the meaning and operation of s 60(4) of the Bankruptcy Act we consider that we should otherwise briefly state our views on the appeal itself. In summary, for the reasons which follow, we would not grant leave to appeal, and otherwise dismiss the appeal.