David John Roberts v Larload Pty Limited

Industrial Relations Commission (NSW)|2005-04-05

CITATION: David John Roberts v Larload Pty Limited [2005] NSWIRComm 1049

APPLICANT David John Roberts

PARTIES: RESPONDENT Larload Pty Limited

CATCHWORDS: Unfair dismissal - Respondent's notice of motion that Applicant a bankrupt and file should be discontinued - Bankruptcy Act (C'th) - common law of bankruptcy - notice of motion rejected.

Bankruptcy Act 1966 (C'th) LEGISLATION CITED: Industrial Relations Act 1996 (NSW)

Geia v Palm Is. Aborioginal Council (1999) Queensland Court of Appeal, 389 (17/9/99) Cummings & Fuller v Claremont Petroleum NL & Anor (1995-1996) 185 CLR 124 Trustee of the Property of Patrick Bede O'Reilly v Law Society of NSW (2001) FCA 701 (12/6/01) Faulkner v Bluett (1981) 52 nFLR 115 CASES CITED: Griffiths v Civil Aviation Authority (1996) 137 ALR 521 Beckham v Drake (1849) 2 HLC 579, 9 ER 1213 M Holcombe v Corsi & Nicolai (Australia) Pty Ltd (Print 5254 - U No 30811 of 97) (18.9.97) D & R Commercial Pty Limited v Flood (2003) 130 IR 21

APPLICANT Mr Wilton (Solicitor) LEGAL REPRESENTATIVES: RESPONDENT Mr O'Reilly (Solicitor)

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Application by David John Roberts re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 This Preliminary Decision concerns an application by the Respondent, pursuant to a Notice of Motion to have the Applicant's s 84 unfair dismissal application discontinued and hence the file closed, on the ground that the Applicant is an undischarged bankrupt and was declared bankrupt on his own petition on 22 March 2004.

2 The Commission has before it an application by David John Roberts ("the Applicant") for unfair dismissal (filed 8 October 2004) against Larload Pty Limited ("the Respondent") pursuant to section 84 of the Industrial Relations Act 1996 ("the Act"). 3 The matter was set down for Conciliation and Directions on 17 November 2004, in Tamworth Court House.

The Applicant appeared and was represented by Mr Wilton, solicitor.

The Respondent was represented by Mr Newman and Mr Schmidt.

The parties engaged in conciliation that day but unsuccessfully. The matter was set down for a Hearing on 11 and 12 April 2005. 4 The matter was relisted on 15 December 2004, to entertain a return of summons.

Mr Wilton continued his appearance for the Applicant.

Mr O'Reilly, solicitor, now appeared for the Respondent. Mr O'Reilly raised an issue during the proceedings as to the Applicant being an undischarged bankrupt at the time of filing of his unfair dismissal claim and accordingly whether the Applicant was then competent to maintain his unfair dismissal application. 5 The matter was relisted on 14 February 2005 in Tamworth, at the request of Mr O'Reilly who sought a hearing on the bankruptcy issue. During the proceedings, Mr O'Reilly flagged the filing of a Notice of Motion. 6 The next day, 15 February, Mr O'Reilly wrote to the Commission advising of a complication in the proceedings. His letter stated he had been advised by the Legal Services Commissioner that the Applicant had complained of Mr O'Reilly's involvement in the proceedings because of a "conflict situation". The Applicant sought that Mr O'Reilly discontinue his involvement in the proceedings. Mr O'Reilly advised accordingly that he would not be filing his planned Notice of Motion.

7 The matter was set down for a teleconference on 21 February - myself being in my Sydney court room and the advocates in Tamworth. Mr O'Reilly advised that the "conflict situation" raised by the Applicant was grounded by reason of the Applicant's earlier instructions to Mr O'Reilly with respect to an unrelated matter.

Mr O'Reilly gave an update on the progress of that complaint to the Legal Services Commission. 8 A further teleconference took place on 1 March. Mr O'Reilly advised that the Legal Services Commissioner had dismissed the complaint by the Applicant.

The Commission put in place a Hearing to deal with the threshold issue as to the competence of the Applicant to maintain his unfair dismissal application. 9 Mr O'Reilly filed his Notice of Motion on 7 March 2005. The hearing of this application took place in Tamworth Court House on 21 March 2005.

10 Mr O'Reilly made oral submissions in support of his Notice of Motion which deposed - (a) By Debtor's Petition dated and filed around 22 March 2004, the Applicant became bankrupt. The Official Trustee in Bankruptcy became the Applicant's Trustee ("the Trustee").

(b) The Respondent contends that by virtue of the operation of s 58(1)(b) of the Bankruptcy Act , 1966 (" the Bankruptcy Act "), the Applicant's right of action (the unfair dismissal application) vests in the Trustee. By facsimile dated 17 December 2004, the Senior Assistant Official Receiver advised that the Trustee did not intend to assume the carriage of the unfair dismissal proceedings.

(c) The Respondent contends that the Applicant is also not able to maintain his unfair dismissal application by way of any exemption provision found in the Bankruptcy Act or found at common law.

Mr O'Reilly's oral submissions (in support of the above deposition) revolved around a decision of the Supreme Court of Queensland - Court of Appeal: Geia v Palm Is. Aboriginal Council (1999) QCA 389 (17 September 1999) (" Geia's case ").

Mr O'Reilly said that Geia's case found that the bankrupt in that case could not bring an action claiming damages or other sums on the basis of wrongful dismissal. Such an action could only be brought by the trustee of the bankrupt and the trustee had declined to do so.

(In Geia's case , the bankrupt had been employed under a written contract for a period of three years and there was a provision in the contract for prior termination in various circumstances. The bankrupt said his contract was brought to an end by notice of termination by the employer and alleged that such notice was a breach of the contract. The bankrupt claimed about $110,000 as monies due and payable under a contract of employment, or as damages for breach of contract. The District Court held that the bankrupt could not bring his action as the action was of a type that vested in the bankrupt's trustee. The Court of Appeal concurred.)

Mr O'Reilly said that the matter before myself was essentially the same as before the Court of Appeal, which held that the action pursued by the bankrupt was one falling within the definition of "property" found in the Bankruptcy Act . Any action falling within that definition could only be brought by the bankrupt's trustee.

Mr O'Reilly noted that the bankrupt did not argue before the Court of Appeal that he was granted an exemption, pursuant to s 116(2)(g) of the Bankruptcy Act , to pursue his action in his own right on the ground that his action arose from a personal injury or wrong done to himself.

Having found that the Bankruptcy Act provided no exemption from its operation, by which the bankrupt could pursue his action in his own right (without his trustee's consent), the Court of Appeal then considered whether the bankrupt could still bring his action pursuant to common law decisions which had recognised in certain circumstances the right of a bankrupt to bring his or her own action. The Court of Appeal found no support for the bankrupt's circumstances in the case before the Court of Appeal.

Mr O'Reilly referred to a letter dated 17 December 2004, from the Senior Assistant Official Receiver, which advised that the Trustee did not intend to assume carriage of the proceedings, before myself, " ... as the liabilities in the bankruptcy total only $14,100 and it is most unlikely given the small amount of debts that any of the creditors would be prepared to indemnify the Official Trustee for costs ."

Mr O'Reilly accordingly sought an order that the Commission discontinue the s 84 unfair dismissal application and close the file.

11 Mr Wilton handed up and spoke to his written submission.

Firstly, it concerned a wrongful dismissal action arising out of a breach of the contract of employment by the employer. It was a common law action of wrongful dismissal. By contrast, to the proceedings before myself, it was not an application arising out of a statutory right of relief (s 84 of the Act ).

Secondly, Geia's case was distinguishable on the remedies available to the parties. In that case, the remedy is with respect to damages alone arising from breach of the contract. In the Applicant's case, the remedies are compensation, reinstatement or re-employment and are not by reference to any breach of the contract of employment. 12 As to the substantive submissions, Mr Wilton contended that the Applicant is competent to bring and maintain his unfair dismissal application. That is, Mr Wilton submitted that the Applicant's s 84 unfair dismissal application was an action of the type exempted from the operation of the Bankruptcy Act - so that the Applicant could bring and maintain his action without the consent of his Trustee.

Mr Wilton relied on the implied and express exemptions found in the Bankruptcy Act , to argue that the Applicant could bring and maintain, in his own right , the s 84 application.

The exemptions relied upon are ss 5 and 116 of the Bankruptcy Act .

Section 5 defines "property" in a broad way, the effect of which is that the property of the bankrupt is vested in the Trustee. Mr Wilton argued that a s 84 unfair dismissal application is not to be characterised as an action involving "property" but as a personal right and therefore not caught by the s 5 definition.

Mr Wilton's second exemption concerns s 116(2)(g). This provision expressly allows a bankrupt to recover damages or compensation for personal injury or wrong done to the bankrupt. Mr Wilton submitted that the unfair dismissal application is with respect to a "wrong" suffered by the Applicant.

The written submission cited several cases in support of the above exemption arguments. In summary, Mr Wilton submitted that the Applicant is entitled to bring and maintain his unfair dismissal application as it was an action personal to him and had not passed to the Trustee in Bankruptcy.

In the alternate, should the Commission not allow the Applicant's application to continue, then Mr Wilton sought that the Commission stay the proceedings pending the Applicant's application to the Federal Court of Australia, under s 178 of the Bankruptcy Act , to challenge the decision of the Trustee not to bring or maintain the unfair dismissal proceedings on behalf of the Applicant. Respondent in Reply

13 The Respondent's submissions in reply made the following points, inter alia:

(a) The Applicant's reliance on the common law decision of Holcombe's case was distinguishable on its facts. In that case, Commissioner Deegan had decided to allow the applicant (a bankrupt) to continue his unfair dismissal application, because the relief being sought by that applicant was reinstatement, rather than compensation. Mr O'Reilly, for the Respondent, submitted that a claim for compensation only would be a claim for a sum of money that would in turn be available to the bankrupt's creditors and hence would be money that would pass to the creditors - if the bankrupt's Trustee so chose to give permission to pursue that sum of money. Thus, compensation pursuant to a s 84 application was not a matter that could be pursued by any applicant. The Applicant in the proceedings before myself sought compensation only and hence, the Respondent said, the Applicant had no personal right to pursue his claim - unless his Trustee agreed and the Trustee did not so agree.

(b) The Respondent, in any event, stressed its position that a bankrupt's right to pursue an action is really limited to the rights granted to the bankrupt by force of statute - that is in this case - the Bankruptcy Act . The Respondent drew on commentary by the Court of Appeal in Geia's case that unless there is a pressing reason to do so, the common law courts should be slow to grant a bankrupt the right to pursue a claim, given that there was a statutory scheme (the Bankruptcy Act ) in place and which specified the exceptions, by which a bankrupt could pursue a claim in his/her own right - without the permission of their trustee. CONSIDERATION

14 The Respondent, by its Notice of Motion, seeks to have the Applicant's s 84 unfair dismissal application discontinued and hence the file closed, on the ground that the Applicant is an undischarged bankrupt.

Having considered the submissions (oral and written), the case laws and relevant statutes, the Commission declines to grant the relief sought by the Respondent. The reasons for so holding are set out below.

The Commission will firstly set out the relevant statutory scheme of the Bankruptcy Act and thence the reasoning for the Commission's finding. The Statutory Scheme surrounding the Bankruptcy Act

15 "The (Bankruptcy) Act follows the pattern of earlier bankruptcy laws. Broadly, and not precisely, the effect of bankruptcy is to divest a bankrupt of his property, to vest that property in a trustee, and to make it (the property) available for the payment of provable debts." Cummings & Fuller v Claremont Petroleum NL & Anor 185 CLR 124 per Brennan CJ, Gaudron and McHugh JJ at 132.

Section 5 of the Bankruptcy Act provides a very broad definition of "property" as being real or personal property of every description belonging to the bankrupt. All such property vests in the bankrupt's trustee for the benefit of creditors. The trustee reduces the property to money for distribution amongst creditors.

Despite the operation of the Bankruptcy Act , which sees the property of the bankrupt vest in the trustee, the Bankruptcy Act does provide an exemption whereby a bankrupt may take a legal action and retain to himself or herself the benefit of that legal action. That is, the benefit does not vest in the trustee . The Bankruptcy Act provides for two different scenarios whereby a bankrupt retains to themself the benefit of a legal action. Firstly, where the bankrupt began their legal action before bankruptcy and secondly, where the bankrupt began their legal action after becoming bankrupt. 16 Based upon a reading of the material supplied by the parties, and from its own research, the Commission will now put forward its understanding of the operation, at law, of these two scenarios.

17 In respect of the former scenario, section 60(2) provides that a legal action commenced by a person who subsequently becomes bankrupt, has their legal action stayed - until their trustee makes election, in writing, to prosecute or discontinue that action. The objective of this s 60(2) provision reflects the operation of the Bankruptcy Act. That is, all property belonging to a person who becomes bankrupt, vests in a trustee, as at the date of bankruptcy, for the benefit of creditors. However, section 60(4) exempts certain legal actions from the s 60(2) stay. These exempt actions include legal actions commenced by the bankrupt in their own name before the bankruptcy and is in respect of any personal injury or wrong done to the bankrupt, their spouse or a member of their family ... Should the bankrupt be successful in this litigation, the proceeds would not form part of the bankruptcy estate. 18 The second scenario is where the bankrupt began their legal action after becoming bankrupt.

In the second scenario, it is still the case that property acquired by the bankrupt, after their bankruptcy declaration, still vests in the trustee: section 58(1)(b).

However , section 116(2)(g) has a similar exemption as found in section 60(4) of the Bankruptcy Act . Section 116(2)(g) provides that a bankrupt may recover damages or compensation for personal injury or wrong done to the bankrupt, their spouse or a member of their family ... Should the bankrupt be successful in this litigation, the proceeds would not form part of the bankruptcy estate.

The subject matter of the above legal action scenario is known as "after acquired property".

The subject matter before this Commission is that of "after acquired property". The Applicant became bankrupt on 22 March 2004. The Applicant was dismissed on 5 October and filed his unfair dismissal application (his legal action) on 8 October 2004. Thus, his legal action is after his date of bankruptcy and any property that devolves on him or he acquires (as he seeks by this very unfair dismissal application) is therefore "after acquired property". "The Common Law of Bankruptcy" 19 Katz J of the Federal Court of Australia, refers to an English work, Williams and Muir Hunter on Bankruptcy (19th ed.) to introduce the topic of "the common law of bankruptcy": Trustee of the Property of Patrick Bede O'Reilly v Law Society of New South Wales (2001) FCA 701 (12 June 2001) at paragraphs 11 and 12. The editors of that work refer to the general rule that the property of a bankrupt vests in their trustee but there are exceptions to this general rule - statutory exceptions and decisions of courts. The latter exceptions being the "common law of bankruptcy". 20 There are English and Australian common law cases which have determined where a bankrupt can bring a legal action in their own right - without the need for the permission, as it were, of their trustee to do so. Lockhart J of the Federal Court of Australia cited some early English cases which evidence the type of non-property action that can be sustained by a bankrupt in proceedings: "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) 8 M. & W.601; 151 E.R. 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, Clarke v Calvet (1819) 8 Taunt. 742; 129 E.R. 573 and Rose v Buckett [1901] 2 K.B. 449; for breach after bankruptcy of a contract for personal service made before bankruptcy, Bailey v Thurston & Co. Ltd. [1903] 1 K.B. 137; for personal injuries arising out of certain breaches of contract such as a contract of marriage, Drake v Beckham (1843) 11 M. & W. 315; 152 E.R. 823." Faulkner v Bluett (1981) 52 FLR 115

(A more detailed history of English and Australian bankruptcy cases, initiated by the bankrupt, is reported by Einfeld J of the Federal Court of Australia in: Griffiths v Civil Aviation Authority (1996) 137 ALR 521)

Lockhart J , in Faulkner v Bluett , went on to say that the common thread running through the above cited 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 the pecuniary loss produced personal inconvenience to the bankrupt. But 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. (emphasis added) Lockhart J then cited the oft-quoted passage of Erle J in Beckham v Drake (1849) 2 HLC 579; 9 ER 1213: " The right of action does not pass (to the trustee) 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 ." (emphasis added) The Applicant's Circumstances v Reasons for Decision 21 The Respondent has made an application pursuant to a Notice of Motion to have the Applicant's unfair dismissal application discontinued on the ground that the Applicant is an undischarged bankrupt. The Respondent relies upon s 58(1)(b) of the Bankruptcy Act to contend that the Applicant's right of action (the unfair dismissal application) is an action concerning "property" of the Applicant, and, as such, that right of action vests in the Applicant's Trustee. Further, as that Trustee does not intend to assume carriage of that right of action then the unfair dismissal proceedings come to an end and the file is closed.

The Respondent relies upon Geia's case in support of the foregoing. As well, the Respondent highlighted that the Applicant was not seeking reinstatement but compensation and contended that compensation was "property" and therefore passed to the Trustee, who withheld his permission to take carriage of this case.

The Applicant contends that the Applicant's right of action does not go to "property" and that that action is exempt from vesting in the Trustee per s 116(2)(s) of the Bankruptcy Act - which section allows a bankrupt to recover damages or compensation for personal injury or wrong done to a bankrupt. For reasons set out below the Commission rejects the Respondent's Notice of Motion. In doing so, the Commission supports the reasoning of Deegan C of the Australian Industrial Relations Commission: M Holcombe v Corsi & Nicolai (Australia) Pty Ltd (Print 5254 - U No 30811 of 1997) - 18 September 1997) (" Holcombe's case "). This case was relied upon by Mr Wilton for the Applicant. 22 It is correct, as Mr O'Reilly for the Respondent puts it, that the Applicant seeks compensation and not reinstatement. Mr O'Reilly thus characterises the proceedings before this Commission as an application for compensation and hence, an application for "property", which term is defined by s 5 of the Bankruptcy Act in very wide terms.

However, the Commission is unable to agree to this characterisation because of the operation of Part 6, Unfair Dismissal of Chapter 2, of the Industrial Relations Act 1996 (" the Act "). True it is that the Applicant has elected in his unfair dismissal application to tick the box "Monetary compensation" and not the other boxes: "Reinstatement to your former position" or "Re-employment to another to another position". However, by force of the Act , the Commission must consider the above three remedies by a certain order of ranking - that is, firstly : reinstatement; secondly : re-employment; and thirdly , and lastly: compensation.

That hierarchical ranking is found at ss 89(1)(2) and (5) of the Act . Section 89(1) sets out that the Commission may order the reinstatement of a dismissed employee. Section 89(2) establishes expressly the hierarchical ranking between reinstatement and re-employment, by its opening words: " If the Commission considers that it would be impracticable to reinstate the applicant, the Commission may order the employer to re-employ the applicant in another position ... " Section 89(5) establishes expressly the hierarchical ranking amongst the three remedies of reinstatement, re-employment and compensation by its opening words: " If the Commission considers that it would be impracticable to make an order for reinstatement or re-employment, the Commission may order the employer to pay the applicant an amount of compensation ..."

Thus, and irrespective of any applicant's preferred wish/remedy, the Commission is statute bound to consider an unfair dismissal application as, first and foremost, a reinstatement application. Accordingly, an unfair dismissal application is to be characterised as a reinstatement application and not as one for compensation. 23 A reinstatement application could not be "property" for the purposes of s 5 of the Bankruptcy Act. Such an application is personal to the Applicant. A reinstatement application cannot be assigned or transferred to the bankrupt's creditors. If there are say, three creditors, how can each claim one third reinstatement! No one creditor can claim reinstatement for a job that was not his/hers in the first place. Only one person can claim reinstatement and in this case, it is not the creditor(s), but the Applicant. It is an action personal to him.

Accordingly, the Commission holds that the reinstatement application by the Applicant (despite the Applicant's characterisation of his claim) does not vest in the Trustee and hence the Applicant is able to pursue, at law, his unfair dismissal application. 24 The Commission will now deal with the Respondent's submission that the Applicant's unfair dismissal application should be discontinued because he seeks compensation and compensation, so the Respondent asserts is "property" that is divisible amongst the Applicant's creditors.

The Commission has already found that the Applicant is entitled at law to pursue his reinstatement application (albeit not characterised as such by the Applicant) and, as such, the Commission does not need to consider the Respondent's submission that compensation is "property". However, the Commission will still deal with this submission, and for reasons set out below, reject this submission. 25 The Commission does not accept that the compensation that can be awarded by the Commission is "property", divisible amongst the bankrupt's creditors. 26 Firstly, for consideration is the common law bankruptcy cases already referred to above.

Lockhart J in Faulkner v Bluett considered some of the common law bankruptcy cases and said 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 the pecuniary loss produced personal inconvenience to the bankrupt. But 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. (emphasis added). Lockhart J also cited the oft-quoted passage of Erle J in Beckham v Drake (1849) that : " The right of action does not pass (to the trustee) 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 " (emphasis added)

The emphasised words going to the "feelings of the bankrupt" and "pain felt by the bankrupt in respect of his body, mind, or character" are expressions by which a bankrupt can argue that matters falling within these expressions are not "property" and hence do not vest in a trustee. These expressions are not "property" as these expressions are not quantifiable, as in say a provable debt. When an applicant/plaintiff makes a claim for underpayment of wages, then this is a provable debt - there will be a dollar claim against say non payment of overtime, annual leave, etc. This is a provable debt; it is quantifiable . This is not the case with the highlighted expressions referred to above and are not "property" divisible amongst the creditors.

It seems to the Commission that "compensation" (as it is understood in the context of Part 6, Chapter 2 of the Act ), also falls within the range of those expressions.

When a member of the Commission orders the payment of "compensation", it is done so in the context of the "unfairness" visited upon the dismissed employee by the conduct of the employer. "Unfairness" is an undefined concept and is a matter for the discretion of the Commission member. Further, the degree of "unfairness" varies with each unfair dismissal decision made by a Commission member. 27 Secondly, the Commission does not accept that "compensation" is "property", given the approach adopted by the Commission in assessing the quantum of "compensation" to be ordered. In assessing the quantum of "compensation" to be ordered, the Commission has no mathematical formula to follow. This has been confirmed by a Full Bench of the Commission (Wright J - President, Walton J - Vice President, Tabbaa C) in : D and R Commercial Pty Limited v Flood (2003) 130 IR 21.

The quantum of compensation ordered is a matter for the discretion of the Commission member.

This non-mathematical approach to the assessment of "compensation" is to be contrasted to the known quantum of damages sought by a plaintiff who makes a claim for specified underpayments for such matters as annual leave or long service leave entitlements; underpayment claims for meal or travelling expenses or overtime payments. All of these matters are claimed by a plaintiff who specifies in dollar terms the amount of underpayment and/or non payment against each claim. Such matters have a specific dollar value relating to the pecuniary loss of the plaintiff. These are provable debts and vest in the trustee as divisible amongst the creditors.

"Compensation", however is not a provable debt. It is a matter for the discretion of the Commission member. 28 In summary, the Commission has, in the alternate, considered and rejected the Respondent's submission that "compensation" is "property" divisible amongst the creditors. The Commission has rejected this submission on two grounds. Firstly "compensation" is a concept that is assessed against the "unfairness" of the employer's conduct in dismissing an employee and as such is a concept in the same terms as those expressions recognised by common law decisions as not being "property". Secondly, "compensation" is a concept that is not quantifiable in a mathematical formula approach, unlike a provable debt. It is a matter entirely for the discretion of the Commission member. 29 The Commission also takes the opportunity to comment on Geia's case which was relied upon by the Respondent to support its submission.

The only similarity between Geia's case and the circumstances of the Applicant before the Commission, is that both concerned a legal action begun by an applicant after the date of bankruptcy and hence fall within the second scenario referred to above: "after acquired property". Apart from that, the similarity ends.

Geia's case concerned a legal action for damages for breach of contract. That is, a claim for $109,692.30 as monies due and payable under a contract of employment or as damages for breach of that contract. The breach of the contract was as a result of the defendant giving notice to the applicant, per their contract, to terminate their contract. Geia's case was therefore not an unfair dismissal claim seeking reinstatement, re-employment or compensation. The Trustee and Costs

30 The Commission needs to comment on a matter arising during proceedings. This matter goes to the Trustee and his/her knowledge about the role of "costs" in the context of unfair dismissal applications under Part 6, Chapter 2 of the Act.

The Respondent provided evidence that the Applicant's Trustee would not assume carriage of the unfair dismissal proceedings before myself. This view of the Trustee is found in a facsimile transmission to Stephen O'Reilly, dated 17 December 2004. This one page document is attached to the Respondent's Notice of Motion.

(In the second last paragraph, the Trustee refers to Geia's case and that it found that the right to bring an " unfair dismissal " case vests in the trustee in bankruptcy. However, the Commission notes that the Supreme Court of Queensland - Court of Appeal in Geia's case said its decision surrounded an action for "wrongful dismissal". The action was begun in the District Court (presumably Queensland) and not before an industrial tribunal.)

In the last paragraph, the Trustee raises the issue of costs as follows: " The Official Trustee in Bankruptcy does not intend to assume carriage of the proceedings as the liabilities in the bankruptcy total only approximately $14,100 and it most unlikely given the small amounts of debts that any of the creditors would be prepared to indemnify the Official Trustee for costs. "

It appears from this quote that the Trustee has the view that unfair dismissal applications operate in an automatic costs jurisdiction, where the winner of the case gets costs. If that is the understanding of the Trustee, then that view is incorrect. The nature of the unfair dismissal jurisdiction is essentially a no costs jurisdiction. Armed with this knowledge, this Trustee or any other trustee might view their decision in a different light, as to whether to assume carriage of an unfair dismissal application. CONCLUSION

31 The Commission has had before it, an application by the Respondent, by way of a Notice of Motion, to have the Applicant's s 84 unfair dismissal application discontinued and hence the file closed, on the ground that the Applicant is an undischarged bankrupt.

Having considered the submissions (oral and written), the case laws and relevant statutes, the Commission declines to grant the relief sought by the Respondent.

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.

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