Ms Luck's bankruptcy
9 The first preliminary question arises because approximately three weeks before the hearing of this appeal, on 4 April 2017, a sequestration order was made against the estate of Ms Luck by Judge Kelly of the Federal Circuit Court of Australia.
10 In April 2017, on Ms Luck's application, North J ordered pursuant to r 36.08 of the Federal Court Rules 2011 (Cth) that "the proceedings under the sequestration order of Judge Kelly…be stayed pending the determination of [Ms Luck's appeal against the making of the sequestration order]".
11 The Court has the "power to grant a stay, pending the hearing of an appeal against a sequestration order, of some or all of the proceedings or steps which would otherwise be taken as a consequence of the sequestration order…": Coleman v Lazy Days Investments Pty Ltd (1994) 55 FCR 297 at 301E. It was that power that North J exercised in April 2017. This proceeding is not a proceeding under the sequestration order, so it is unaffected by the stay order.
12 An issue does arise, however, under s 60 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act). It provides, relevantly, as follows:
Stay of legal proceedings
(1) The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit:
(a) discharge an order made, whether before or after the commencement of this subsection, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or
(b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor:
(i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or
(ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt;
and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non-payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody.
(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
...
13 Section 116(1)(b) and (2)(g)(i) of the Bankruptcy Act provide as follows:
Property divisible among creditors
(1) Subject to this Act:
…
(b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge…
…
is property divisible amongst the creditors of the bankrupt.
(2) Subsection (1) does not extend to the following property:
…
(g) any right of the bankrupt to recover damages or compensation…
(i) for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt…
…
and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person;
…
14 It follows, as the parties recognised, that this proceeding is stayed by force of s 60(2) of the Bankruptcy Act until the trustee makes an election or the time limit in s 60(3) expires, unless s 60(4) operates to permit Ms Luck to continue the proceeding in her own name.
15 We were informed by counsel for the respondent that the respondent had not notified, and, as we apprehend it, does not presently intend to notify, Ms Luck's trustee in bankruptcy for the purposes of s 60(3), and that the 28-day period within which the trustee must elect to prosecute or discontinue the action has not commenced to run.
16 Both Ms Luck and the respondent contended that Ms Luck's application under the ADJR Act for review of the 3 June 2008 decision was "an action commenced by…her before…she became a bankrupt in respect of…any personal injury or wrong done to the bankrupt…" within the meaning of s 60(4)(a) of the Bankruptcy Act.
17 There is no question that an application for leave to appeal is an "action" within the meaning of s 60(2): see Sarkis v Moussa (2012) 262 FLR 359 at [31]-[37] per Beazley JA. So too is an appeal: see Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 130 per Brennan CJ, Gaudron and McHugh JJ.
18 The question that arises here is whether an application for judicial review under s 5 of the ADJR Act seeking the review of a decision that is alleged to be made under an enactment is an action "in respect of any personal…wrong done to the bankrupt".
19 In Cox v Journeaux (No 2) (1935) 52 CLR 713 at 721, Dixon J said of the then equivalent provision (s 63(3) of the Bankruptcy Act 1924 (Cth)) that "[t]he 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".
20 As Lockhart J explained in Faulkner v Bluette (1981) 52 FLR 115 at 119:
The common thread running through [the common law cases that preceded the 1883 English Bankruptcy Act] is that where the primary 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.
(Citations omitted.)
21 In Moss v Eaglestone (2011) 83 NSWLR 476 at 486-494, Allsop P (as the Chief Justice then was) traced the legislative history of ss 60 and 116 of the Bankruptcy Act and their English equivalents. We need not repeat it. It is sufficient for present purposes to note that that legislative history and the plain words of ss 60(4) and 116(2)(g)(i) make clear, as his Honour observed (at [64]), that:
…the distinction [in those sections] 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.
22 It also follows from the terms of those provisions that the question of whether the action is "in respect of any personal injury or wrong done to [the bankrupt applicant]… require[s] the substance of the matter to be examined": Moss v Eaglestone (2011) 83 NSWLR 476 at [65].
23 In Moss v Eaglestone (2011) 83 NSWLR 476, the Court of Appeal held that an action for defamation, being a wrong to a person's reputation, is an action in respect of a personal injury or wrong, and that there was no sound reason in logic or policy why a claim for the loss of such a chose in action should enure for the benefit of the creditors when the primary claim did not: at [8], [65], [81] and [82].
24 In Fisher v Transport for NSW (2016) 316 FLR 72; [2016] NSWSC 1888, McCallum J held that an application for judicial review by a bankrupt bus driver of a decision to cancel his authority as a bus driver fell within the exception in s 60(4) because the notion of "personal injury or wrong" might include an adverse administrative decision: Fisher v Transport for NSW (2016) 316 FLR 72; [2016] NSWSC 1888 at [36].
25 In our opinion, an application for judicial review under s 5 of the ADJR Act of the type made by Ms Luck in this case, concerning a decision which she alleges impugns her character in various different ways, is, as both parties agreed, not a right of action that passes to the trustee in bankruptcy. The trustee has no interest in it. It is, rather, a right of action (if it be a right of action) that relates to the appellant's "person or feelings" and thus remains with her. She may therefore maintain the appeal in her own name and the Court may hear it.