Both actions relate to a building consisting of six accommodation units constructed on land which Mrs Somerset owned in Toowoomba. Two of the units had ceiling heights slightly less than those specified in the building plans and slightly less than the minimum prescribed under the Standard Building By-Laws. In action 4727 of 1987, Mrs Somerset sued a variety of persons associated in one form or another with the construction of the building, including Esanda which provided the finance under a mortgage. In the later action, 660 of 1988, Esanda sued Mrs Somerset for possession of the property, and all of the units have now been sold and transferred either by Mrs Somerset or by Esanda as mortgagee. There is no possible basis upon which Mrs Somerset could now regain possession, and counsel for Mrs Somerset accepted that there is no purpose in proceeding with the appeal in action 660 of 1988, at least unless the appeals in action 4727 of 1987 are continued.

It is convenient, therefore, to concentrate on action 4727 of 1987 in which Mrs Somerset claimed damages. All of the orders to which the appeals relate were made by Ambrose J. who having, on various dates, refused leave to amend the Statement of Claim to add a cause of action based upon the Trade Practice Act 1976 (as amended) Commonwealth, made declarations that, in effect, determined that the Council of the City of Toowoomba had validly reduced the minimum permissible ceiling heights in the two units; dismissed Mrs Somerset's claim against all defendants except the builders of the units, Mr and Mrs Hillenberg; gave judgment for Mrs Somerset against Mr and Mrs Hillenberg for $2,120.00 with costs up to the date of service of the originating process; gave judgment in favour of Mr and Mrs Hillenberg against Mrs Somerset on a counter-claim in the sum of $13,500.00 with interest on the sum of $11,380.00 (being the difference between the two judgments) at 12 per cent per annum for a period of five years (the sum of $6,828.00); and ordered Mrs Somerset to pay Mr and Mrs Hillenberg's taxed costs of the action after the date of service of the originating process.

It is a considerable understatement to say that there is scope for confusion in the course of the proceedings. The declarations were initially made on 30 June 1989, prior to the trial of action 4727 of 1987 and, at that point, there was no appeal. The trial of that action commenced on 2 October 1989, and the issue with respect to the joinder of a claim under the Trade Practices Act was determined adversely to Mrs Somerset on 4 October 1989. Again, there was no appeal at that point. On 2 November, 1989, notice of appeal was given against the declarations made on 30 June 1989, which were repeated in the final judgment in action 4727 of 19787 which was delivered on 30 January 1990. Notice of appeal against that judgment, including the declarations, was given on time on 5 February 1990, which was also the date upon which judgment was given in action 660 of 1988. The notice of appeal in action 660 of 1988 was given on 12 February 1990. Then, on 15 February 1990, notice was given of an application to amend the notice of appeal in action number 4727 of 1987 to include reference to the claim sought to be made under the Trade Practices Act.

More than two years after the first notice of appeal and between one and a half and two years after the last notice of appeal, Mrs Somerset was made bankrupt. There is nothing to indicate that any serious attempt had been made to prosecute the appeals in the intervening period, or for that matter since that time. As stated, the sequestration order was made on 13 November 1991 and, on the following day, the solicitors for Esanda wrote to the Official Trustee in Bankruptcy notifying him of both actions, numbers 4727 of 1987 and 660 of 1988, and that appeals had been instituted by Mrs Somerset in those actions, and requesting him to make an election within 28 days pursuant to s.60 of the Bankruptcy Act 1966 (as amended) either to prosecute or discontinue the actions. The letter was said to enclose copies of the notices of appeal but did not do so, although that is of little significance since it was a plain notification of the existence of the actions and the appeals. Further, the solicitor for one of the other respondents to the appeal in action number 4727 of 1987 had shortly after the sequestration order was made, informed the Official Trustee of that action and the appeal on the previous day. In any event, it is plain from subsequent events that the Official Trustee was under no misapprehension as to the position.

On 6 December 1991, the Australian Government Solicitor wrote on behalf of the Official Trustee in Bankruptcy to the solicitors for Esanda stating, inter alia:

"4. In order that the Official Trustee may make an informed decision concerning the before mentioned appeals, I request that you provide me with copies of the decisions being appealed against and the relevant notices of appeal. My opinion is that the 28 day period referred to in section 60(3) of the Bankruptcy Act should not begin to run until I have received such documents to enable me to understand what the appeals are all about."

On the same day, the Australian Government Solicitor wrote to Mrs Somerset stating, inter alia:

"3. I confirm my advice that under section 60 of the Bankruptcy Act the Official Trustee has 28 days in which to elect whether to prosecute or discontinue any action in the name of a bankrupt within 28 days of obtaining notice of action.

4. Accordingly, I request that you provide me with sufficient information and evidence concerning the Esanda Supreme Court Appeal to enable the Official Trustee to make an informed decision on whether to proceed or abandon the appeal, at your earliest convenience."

Although Esanda had not provided copies of the decisions and the notices of appeal, as requested, the Official Trustee in Bankruptcy had made his decision by 20 December 1991, when the Australian Government Solicitor again wrote to Mrs Somerset in the following terms:

"2. I am instructed that the Official Trustee has decided not to prosecute the appeals in proceedings numbered 4727 of 1987 and 660 of 1988. On its assessment, there is insufficient merit in such appeals to justify the expenditure of legal costs and any other liability likely to be incurred as a result thereof.

3. The Official Trustee is prepared to assign its rights to the causes of action and rights of appeal attached thereto to you on the terms set out in the enclosed draft deed.

4. I note that under s.60(3) of the Bankruptcy Act actions are deemed to have been abandoned after the elapsement of 28 days from when notice of the action is served on the bankrupt's trustee. Esanda's solicitors, Messrs. Corrs Chambers Westgarth sent the Official Receiver a letter dated 14 November 1991 attaching two Notices of Motion, requesting the Official Receiver to elect pursuant to s.60(2) of the Bankruptcy Act. I have sought to delay the running of the 28 day period by writing to those solicitors requesting copies of the Notices of Appeal and the Judgments on which subject appeals are based, arguing that the 28 day period should not run until such documents were provided.

5. As there is some doubt about when the 28 day period runs from, it is in your interest to enter into a Deed of Assignment quickly with the Official Trustee and for you to prosecute the appeals with due expedition. It is arguable that if the 28 day period under s.60(3) has elapsed, the appeal has by operation of that section been abandoned and cannot be resurrected.

6. Hence I suggest that you take this matter up with Mr Battle (to whom I have sent a copy of this correspondence) and advise him of your decision."

Mr Battle was the lawyer representing Mrs Somerset and, on 20 December 1991, the Australian Government Solicitor also wrote to him stating, inter alia:

"2. Please find enclosed a copy of my letter to Mrs Somerset and a draft Deed of Assignment.

3. For the reasons set out in my letter to Mrs Somerset, could you please advise your client and arrange for her to make a decision about the Deed of Assignment as quickly as possible."

Mrs Somerset signed the Deed of August on 23 December 1991 and it was subsequently executed by the Official Trustee in Bankruptcy on or about 8 January 1992. It is a curious document. In consideration of its terms and the sum of $1.00, the Official Trustee purported to assign to Mrs Somerset "the appeal rights and the cause of action" in respect of actions 4727 of 1987 and 660 of 1988 and Mrs Somerset agreed:

"(i) To initiate and prosecute the appeals and the proceedings with reasonable expedition;

(ii) On making by the Court of an order avoiding damages in favour of the Assignee or on the making of a legally binding compromise of the said proceedings, to pay any amount received from a Defendant in such proceedings to the Assignor who shall administer such funds in accordance with the provisions of the Bankruptcy Act 1966."

On 20 January 1992, the Australian Government Solicitor wrote to the solicitors for Esanda informing them "that the Official Trustee in Bankruptcy has assigned its interest in the cause of action the subject of these appeals to the bankrupt Elsie Joy Somerset ...", and that the letter was "intended to be notice to your client Esanda Finance Corporation Limited of the assignment pursuant to section 199 of the Property Law Act." Similar notification was given on the same day to the other respondents to the appeals in action 4727 of 1987.

It is unnecessary to consider whether a transaction such as that recorded in the Deed of Assignment might have legally and properly been entered into within the 28 day period provided for by s.60 of the Bankruptcy Act. Plainly, in this instance it was not. The Official Trustee in Bankruptcy was given notice of the actions by the letter from the solicitors for Esanda dated 14 November 1981. Quite apart from the decision made by the Official Trustee not to prosecute the appeals which was communicated by the letter dated 20 December 1991 from the Australian Government Solicitor to Mrs Somerset, more than 28 days had elapsed when the first signature was placed on the Deed of Assignment by Mrs Somerset on 23rd December 1991. The other party, the Official Trustee in Bankruptcy, did not sign until a little more than a fortnight later.

In such circumstances, by operation of s.60, action 4727 of 1987 was deemed to have been abandoned. Of course, that being so, the appeals in that action did not survive. When the Deed of Assignment was executed, there was nothing to assign.

When this emerged in the course of argument before this Court, counsel for Mrs Somerset sought an extension of time pursuant to s.33 of the Bankruptcy Act for the Official Trustee's election under s.60. Even if it be assumed that such an application could properly be made to this Court by oral application from the Bar table, that the bankrupt and not her trustee could make such an application, and that there is power to extend time in such circumstances nunc pro tunc, there is not the slightest basis shown for exercising a discretion to extend time in Mrs Somerset's favour.

It is sufficient to refer to some of the factors which, on the contrary, strongly indicate that no order extending time should be made.

It is more than two years since final judgment was given in both actions and the final notice of appeal was filed. Nothing, or very little, has been done by Mrs Somerset to prosecute the appeals, some of which were out of time. It is approximately 18 months since her trustee decided not to prosecute the appeals because "there is insufficient merit in such appeals to justify the expenditure of legal costs and any other liability likely to be incurred as a result thereof". The material before the Court indicates that there has not at any stage been a meeting of creditors of Mrs Somerset's bankrupt estate and that, although served with the notices of motion setting out the relief which Esanda now seeks, the Official Trustee in Bankruptcy decided not to appear on these applications. The Official Trustee does not seek the prosecution of the appeals and there is no advantage to Mrs Somerset in doing so save such indirect benefit as might flow from an increase in the assets available for distribution to her creditors if she was successful and recovered some further amount. While the Court is not in a position to make a definitive assessment of the merits of Mrs Somerset's appeals, there is certainly no reason to assume any likelihood for success of a claim which, in its most extreme form, seeks an assessment of damages on the basis of demolition of the units, which have now been sold, and appears to involve complaints against virtually everyone involved at any time, including the trial judge. Further, some aspects of the relief which Mrs Somerset seeks on the appeals are plainly of no benefit to anybody; for example, her attempt to invalidate the decision of the local authority reducing the minimum permissible height of the ceilings, a course which might involve serious detriment to the purchasers of the property who are not even represented in the proceedings. However strong Mrs Somerset's sense of grievance, there is a element of futility, if not absurdity, in this attack on a decision which, if it operated in any way to reduce Mrs Somerset's damages, did so only because it diminished her loss. Finally, of course, Mrs Somerset as a bankrupt is not in a position to pay the costs if she is unsuccessful in the appeals.

In all the circumstances, it is quite clear that no indulgence ought be granted to Mrs Somerset to enable her to pursue her appeals in action 4727 of 1987 and that, accordingly, those appeals should be struck out. Since there is no purpose to the appeal in action 660 of 1988 in that event, it should suffer a similar fate.

The order of the Court is that the appeals in actions 4727 of 1987 and 660 of 1988 are struck out, with costs to be taxed.

Judgment of the Court delivered the 26th day of June, 1992

Appeals in actions 4727 of 1987 and 660 of 1988 are struck out, with costs to be taxed.

MINUTE OF ORDER: Appeals in actions 4727 of 1987 and 660 of 1988 are struck out, with costs to be taxed.

CATCHWORDS: Appeal and new trial - practice - time - extension - application/bankrupt appeals 2 years after final judgment - official trustee purported to assign its rights of appeal to applicant - whether as assignment not within 28 day period appeal deemed abandoned - whether extension ought to be granted - Bankruptcy Act s.60, s.33

Mr E. Blanch for the Second, Fourth and Fifth Respondents

Solicitors: Toowoomba Community Legal Service for the Appellant

Messrs. Corrs Chambers Westgarth for the Sixth Respondent