Case: Geia v Palm Island Aboriginal Council (1999) 152 FLR 135
Outcome: distinguished
In particular, the respondents relied upon a decision of the Court of Appeal in Queensland in Geia v Palm Island Aboriginal Council (1999) 152 FLR 135. In that case, the appellant, who was a bankrupt, sued the respondent for money said to be due under a contract of employment or for damages for breach of contract arising out of wrongful dismissal. The District Court Judge dismissed the proceeding on the ground that the cause of action had vested in the Official Trustee. The bankrupt appealed but the appeal was dismissed on the ground that an action for damages for wrongful dismissal (not including services actually rendered) vests in the Official Trustee. The Court of Appeal distinguished such claims from contracts for personal service which do not vest in the Official Trustee. 33 The applicant contended that the decision in Geia 152 FLR 135 was an action claiming damages on the basis of wrongful dismissal. The issue before the Court of Appeal, it was said, was not whether such an action was property within the meaning of the Act but whether the action could be said to be impliedly exempt by reason of "the common law of bankruptcy". 79 I also agree, with respect, with the decision of the Full Bench of the New South Wales Industrial Relations Commission in Perfection Dairies Pty Ltd v Finn [2006] NSW IR Comm 137. In that case, the appellant before the Commission had summarily dismissed the respondent from employment for wilful misconduct. A Commissioner had ordered the respondent be reinstated and that the appellant pay the respondent an amount which equated to the remuneration he would have received but for the dismissal. One of the issues raised on that appeal was whether the respondent, as an undischarged bankrupt, had standing to bring the application for reinstatement. The Commission, after referring to the sections of the Bankruptcy Act to which reference has been made in these reasons and after referring to the dicta of Cooper J in Griffiths v Civil Aviation Authority 67 FCR 301 , to which I have also made reference, and the judgment of the Queensland Court of Appeal in Geia v Palm Island Aboriginal Council 152 FLR 135, said at [38]-[39]: Employment is not usually referred to, or known as, property. Whatever legal "interest" an employee has in his or her employment, it is not a property interest. In any event, it seems clear from reference to the relevant statutory provisions and the case law that, although the expression "property", and cognate expressions such as "the property of the bankrupt" and "after acquired property", are to be construed in a very wide sense, the bankrupt's employment is not considered "property" for the purposes of the Bankruptcy Act . Indeed, all the pertinent indications in the statute and the case law are to the opposite effect. For example, there are a number of references in the Bankruptcy Act to "property divisible among the bankrupt's creditors" (see, for example, s 58(6) and the definition of "the property of the bankrupt" in s 5) ; it could not seriously be suggested that the bankrupt's employment, or the bankrupt's rights as to his or her employment could be divisible among the creditors. Indeed, the statute recognises that it is most desirable that the bankrupt be able to earn income during the course of the bankruptcy and also contemplates the likelihood that a bankrupt who was an employee prior to the bankruptcy would continue to be in employment. The references we have cited from division 4B of the statute, including the references to ss 139L and 139U are also in point. In particular, we do not detect in the scheme of the Australian statute any provision which would be at odds with the observation in the judgment of the English Court of Appeal in Ex part Vine ; re Wilson, where reference was made to the necessary exception to the property of the bankrupt being divisible amongst his creditors, "in order that the bankrupt might not be an outlaw, a mere slave to his trustee; he could not be prevented from earning his living". 81 In Geia v Palm Island Aboriginal Council 152 FLR 135 the bankrupt sued for damages for breach of contract or for moneys due and payable under a contract of employment. The bankrupt sought $109,692.30 in relation to a contract of employment which was for three years but which was terminated by the employer some weeks before the bankruptcy. The argument before the lower Court was whether the action was one falling within s 116(2)(g). That was rejected by the District Court Judge and not pursued in the Court of Appeal. In that court, the bankrupt argued that the cause of action was exempt under the "common law of bankruptcy". The critical issue in Geia v Palm Island Aboriginal Council 152 FLR 135 was explained (at 137): We were referred to Affleck v Hammond [1912] 3 KB 162 and to Thistlethwayte v Gender Estates Pty Ltd (1976) 8 ALR 700 , in both of which Bailey v Thurston &amp; Co Ltd was relied on; but each of those cases concerned a different point, which was whether the bankrupt could sue for "moneys which, by his personal effort, he had earned": see Thistlethwayte (at 702). We have mentioned above that it is conceded that no such moneys are in issue in this case, where the plaintiff says he has a right to damages, or to be paid at the agreed rate past the date when his employment was terminated. 83 Geia v Palm Island Aboriginal Council 152 FLR 135 was a case about a claim for damages, not a case about a claim for loss of wages. As such, it does not address the issues raised in these reasons. 84 The application to dismiss or stay the applicant's proceeding on the ground that the applicant lacked standing is dismissed. 85 The respondents sought, if their first application was dismissed, security for costs.