Case: Rogers v Asset Loan Co Pty Ltd &amp; Ors [2006] FCA 434
Outcome: followed
The factual background to this matter is set out at some length in the judgment of Greenwood J in Rogers v Asset Loan Co Pty Ltd &amp; Ors [2006] FCA 434 at [8] [27]. The applicant and the respondents before his Honour were the same parties as are currently before me. Before his Honour, the applicant sought various orders, including interlocutory relief restraining the respondents from exercising a power of sale, and in respect of a number of loan agreements, deeds of settlement, mortgages and other instruments relating to various properties. 5 At that hearing the respondents submitted, and Greenwood J found, that the majority of Mr Rogers' claims for final relief involved claims related to the legal or beneficial interest of the applicant in property which vested in the trustee in bankruptcy, and accordingly in respect of which the applicant had no standing to institute legal proceedings ([2006] FCA 434 at [35]). However his Honour noted that s 116(2) Bankruptcy Act 1966 (Cth) (' Bankruptcy Act ') excised categories of property from the interests, rights, capacities and powers divisible among the bankruptcy's creditors, including: '... (g) any right of the bankrupt to recover damages or compensation; (i) for personal injury or wrong done to the bankrupt, the spouse 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.' 6 Mr Rogers claimed that the matters he sought to agitate before his Honour by way of final relief and interlocutory relief fell within the exemption contemplated by s 116(2)(g) Bankruptcy Act because, properly understood, the claims constituted a claim with respect to a 'wrong done to the bankrupt' and the right to recover damages or compensation for each wrong remained with the applicant. As his Honour summarised: 'In effect, Mr Rogers says a claim based upon conduct on the part of the respondents that bears the statutory character of misleading or deceptive conduct or unconscionable conduct on the part of ALC or ALCPL (or the respondents more generally) in connection with the supply of financial services reflected in the various deeds, is a claim for compensation for a wrong which Mr Rogers is entitled to assert.' ([2006] FCA 434 at [40]) 7 Before Greenwood J the respondents said that, to the extent that such a claim, however it might be formulated, is one with respect to a legal or beneficial interest of the bankrupt in land or involves any right, power or capacity in relation to such an interest, the claim vests in the trustee in bankruptcy. 8 After considering each of the applicant's claims for relief and the meaning of the phrase 'wrong done to the bankrupt' in the context of s 116(2)(g) , Greenwood J held that: 'Where the claim for final relief arising out of the conduct of a respondent reflects a claim with respect to both the rights of the bankrupt in property and a claim with respect to a wrong done to the bankrupt characterised as a claim by reference to the anxiety, stress and pain felt by the bankruptcy, the rights of action in respect of the bankrupt's interests in property vest in the trustee and those rights of action where the essential cause is emotional injury done to the bankrupt (in respect of a recognised cause of action) remain with the bankrupt.' (at [47]) 9 His Honour continued: 'It may be that when Mr Rogers or his advisers formulate a statement of claim in the proceeding, a claim might emerge which, in terms of its material facts, reflects a claim within the exemption reliant upon conduct which involves a contravention of ss 52 , 51AC or 60 of the Trade Practices Act 1974 (Cth) independently of any of the former rights of the bankrupt in property which have become vested in the trustee. At the moment the material does not establish any such right. The alleged contraventions of the Trade Practices Act 1974 (Cth) which are mere conclusionary assertions are relied upon as the basis for final orders with respect to the interests of the bankrupt in property which interests have become vested in the trustee.' (at [48]) 10 Similarly a claim by the applicant for interlocutory relief in the form of 'an order that the respondents do not harass, intimidate or coerce the applicant, his family or neighbours' was not a claim called in aid of a claim for final relief within the scope of s 116(2)(g) Bankruptcy Act , but rather was in connection with an injunction to restrain an exercise of power of sale in relation to a particular property by a secured creditor in aid of final relief in relation to that property. The applicant's interest in the property was an interest vested in his trustee. However his Honour left open the possibility that the applicant could properly formulate a claim for final relief within the exemption in s 116(2)(g) , and a claim for interlocutory relief in respect of relevant conduct, which claim might well be made by the applicant independently of his trustee in bankruptcy (at [48] and [51]). 11 In the notice of motion before me, the respondents seek orders in respect of what is, in essence, the applicant's attempt to take on board the comments of Greenwood J in Rogers v Asset Loan Co Pty Ltd , namely an attempt by the applicant to formulate his statement of claim so as to plead claims coming within the exemption in s 116(2)(g) Bankruptcy Act . 12 After the decision of Greenwood J was handed down, the applicant filed a statement of claim on 15 June 2006, and an amended statement of claim on 19 June 2006. 13 When I heard this notice of motion on 29 June 2006, it became apparent that the applicant required leave to further amend his statement of claim filed 19 June 2006. Mr Coulsen on behalf of the respondents consented to an adjournment of the matter to allow the applicant to be given an opportunity to re-plead. In making this suggestion Mr Coulsen said that this would be the last time his clients would so consent. Consequently, the matter was adjourned until 4 August 2006 and the applicant was ordered to file and serve an amended statement of claim by 21 July 2006. 14 When this matter came back before me on 4 August 2006, it became apparent that the applicant had in fact filed two further amended statements of claim during the adjournment period, one on 10 July 2006 and one on 20 July 2006. Nonetheless, and notwithstanding the inconvenience to the respondents as it appeared that the further amended statement of claim of 20 July 2006 had not been served on the respondents, in order for the matter to be heard the respondents did not object to the hearing proceeding on the basis of the statement of claim filed 20 July 2006. I adjourned the hearing for a short time to allow Mr Coulsen the opportunity to compare the two documents and if necessary amend his submissions. 24 As Greenwood J noted in his judgment ([2006] FCA 434 at [4]) with respect to the claims of the applicant against the respondents, the most immediate difficulty confronting the applicant is the question of whether he has standing in connection with this litigation, on the basis that a sequestration order in respect of the applicant's estate was made on 23 February 2005. His Honour explained: &#8226; the effect of s 58 Bankruptcy Act , which vests the property of the bankrupt in the registered trustee (at [36]) &#8226; the meaning of 'property of the bankrupt' for the purposes of s 58 , which is defined as 'the property divisible among the bankrupt's creditors; and any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt' (at [36]) &#8226; the fact that property divisible amongst the creditors for the purposes in s 116 includes '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 own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his discharge' (at [37]) &#8226; that only the trustee in bankruptcy is entitled to seek remedial orders in respect of property, contractual rights, security interests, and related entitlements (at [43]) &#8226; that the exemption in s 116(2)(g) with respect to wrongs done to the bankrupt is limited to those cases where the essential cause of action is the personal injury done to the person or feelings of the bankrupt, as distinct from where the damages or part of them are to be estimated by reference to the bankrupt's rights of property (at [45]-[47]; cf Daemar v Industrial Commission of New South Wales (1988) 79 ALR 591 at 601, Cox v Journeaux (No 2) [1935] HCA 48 ; (1935) 52 CLR 713 at 721, Faulkner v Bluett (1981) 52 FLR 115 at 119) &#8226; that a claim with respect to a wrong done to the applicant characterised by reference to the anxiety, stress and pain felt by the bankrupt in respect of a recognised cause of action remains with the applicant under s 116(2)(g) Bankruptcy Act (at [46]) and &#8226; that in the case before his Honour the claims were not claims for damages founded upon immediate reference to the distress and anxiety caused to the bankrupt without reference to his rights of property (at [49]); further the applicant's claim for final relief was a consequential claim necessarily connected with the applicant's interests in property (at [50]). 25 It is unnecessary for me to add to the comments of Greenwood J with respect to the consequences of the bankruptcy of the applicant and its impact on his standing in the case before me. Clearly, for the applicant as distinct from his trustee in bankruptcy to have standing to maintain a cause of action it is necessary that he not only plead that a personal injury or wrong has been done to him, but that the essential cause of action is that personal injury or wrong has been done to him. 26 Throughout his statement of claim the applicant relies on breaches of ss 51AA , 52 and 60 Trade Practices Act as founding his causes of action. These sections read as follows: ' 51AA: Unconscionable conduct within the meaning of the unwritten law of the States and Territories (1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. (2) This section does not apply to conduct that is prohibited by section 51AB or 51AC . 52 : Misleading or deceptive conduct (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1). 60: Harassment and coercion A corporation shall not use physical force or undue harassment or coercion in connection with the supply or possible supply of goods or services to a consumer or the payment for goods or services by a consumer.' 27 It is useful to make a number of preliminary points concerning these provisions before examining the substance of the applicant's complaint. 132 This is surprising in light of the finding of Greenwood J that, in view of his bankruptcy, the applicant lacked standing to pursue claims other than those which were clearly in respect of a personal injury or wrong done to the bankrupt or his family. Unfortunately, in my view the preponderance of the statement of claim appears to revisit a great deal of the material which was before Greenwood J, which his Honour held did not give rise to causes of action in respect of which the applicant had standing. 139 Although ordinarily a party should be given an opportunity to replead in accordance with the rules ( Turner v The Bulletin Newspaper Co Pty Ltd [1974] HCA 25 ; (1974) 131 CLR 69 per Barwick CJ (Mason J agreeing) at 81; cf Fox Symes at [95]) in my view it would be unjust to the respondents to allow the applicant yet another opportunity to re-plead. In particular I note: &#8226; Greenwood J had earlier dismissed an application by the applicant for interlocutory relief in this matter on the basis that, inter alia , the applicant lacked standing to bring the application, but noted that it was possible that the applicant could formulate a statement of claim involving rights which had not vested in the trustee in bankruptcy ( Rogers v Asset Loan Co Pty Ltd &amp; Ors [2006] FCA 434 at [48] ) &#8226; on 15 June 2006 the applicant filed a Statement of Claim &#8226; on 19 June 2006 the applicant filed an Amended Statement of Claim, although this amended statement of claim was not provided to the respondents until 29 June 2006 when the parties appeared in Court &#8226; when this matter came before me for the notice of motion to be heard on 29 June 2006, it became apparent that the applicant would in fact need to file a further amended statement of claim. I ordered that the applicant be given 21 days in which to file a further amended statement of claim &#8226; the applicant did so in compliance with this order, but then also filed a second further amended statement of claim 10 days later.