Sturdy Components Pty Ltd v Trustee of the Bankrupt Estate of Sturt

EX TEMPORE REASONS FOR JUDGMENT 1 These are applications for leave under s 58 (3) of the Bankruptcy Act 1966 (Cth), in the case of one matter which is a bankruptcy, and under s 249 (3), in the case of the other which is an administration of an estate in bankruptcy. Those two provisions are identical for practical purposes, and the matters are so closely associated that I have heard the applications together and shall not differentiate between them in these reasons. 2 The bankrupt estates are involved in a third cross-claim, brought by a cross‑defendant to the first cross‑claim, in a proceeding in the Common Law Division of the Supreme Court of New South Wales involving personal injuries sustained by the use of equipment, for which it is alleged in those proceedings by the defendant that the cross-defendants, at least in the first cross-claim, are to some degree responsible. The applicant before me, as a cross-defendant, seeks to continue a cross‑claim already instituted, under which, if the applicant is held to be liable, it is claimed that the trustees in bankruptcy will be responsible to meet all or some of the claim. It is, unusually, not a case in which leave is sought on the footing that there is insurance so that no ultimate burden is going to be imposed on the bankrupt estate. Here, on the contrary, if the claim is ultimately successful, there will undoubtedly be proofs of debt lodged in each of the estates. 3 It has been held that the Court has power to make an order nunc pro tunc in a case where a proceeding has already been launched or continued before the application comes before this Court. I refer to Re Veghelyi Smith v Official Trustee in Bankruptcy (1993) 45 FCR 413 at 417, a decision of Sweeney J and In the matter of the Bankrupt Estate of Sharp; Ex parte Tietyens Investments Pty Ltd (in liq),an unreported decision of Weinberg J delivered on 26 October 1998, where the earlier decision was accepted as correct. 4 It has also been held that, when exercising its discretion under s 58(3), in complex proceedings of the nature of those here involved, the Court should ask how integral the claim sought to be pursued is to the claims made by the other parties. Such a case was Re Rose; Ex parte Devaban Pty Ltd, an unreported decision of Hill J delivered on 7 October 1994. His Honour said that the claims made against the bankrupt were inseparable from the claims made against another party to the action, and he regarded that as a relevant consideration. Weinberg J, in the decision of his to which I have already referred, cited the decision of Hill J, considering he ought to apply it. He was of the view that the proceedings in question could not be effectively prosecuted without the active participation of the bankrupt. 5 Another case, where interests other than those of the creditors in the estate had to be taken into account, was the Full Court decision of Fraser v Commissioner of Taxation (1996) 69 FCR 99. There the special circumstances were considered to justify a grant of leave. The actual facts are further removed from the present case than the other matters I have just cited. The Full Court thought it was appropriate to require the applicant to undertake to keep the Official Trustee advised in connection with the proceedings. During the argument, I made reference to an earlier Full Court decision in Allanson v Midland Credit Ltd (1977) 30 FLR 108. That was a decision of Bowen CJ, Riley and Deane JJ. It was also a case involving a cross-claim. Their Honours said (at 114):