Case: Fitzpatrick v Keelty [2007] FCA 1658
Outcome: referred to
The applicant is a bankrupt, pursuant to orders of the Federal Magistrates Court of 22 May 2007: see Kidney v Fitzpatrick [2007] FCMA 943. An application to set aside the bankruptcy notice had earlier been dismissed by the Federal Magistrates Court: see Fitzpatrick v Kidney [2007] FMCA 942. An appeal from those orders, and certain related orders, was dismissed by a judge of this Court (Madgwick J) on 19 September 2007: see Fitzpatrick v Keelty [2007] FCA 1658. His Honour did not "order a stay or injunction or do anything else of the kind that would prevent the ordinary operation of s 60 of the [Bankruptcy] Act" (see [38] of his Honour's reasons). Other orders had also been made by the Federal Magistrates Court on 3 August 2007 in the context of an application for annulment, which were somewhat unusual: see Fitzpatrick v Kidney [2007] FMCA 1422. The effect of the orders was to make an order for annulment, but to stay the operation of that order for 28 days and subject the annulment to the fulfilment of certain conditions. There has been no suggestion that the conditions the subject of the orders of 3 August 2007 have been satisfied. 31 Section 60 of the Bankruptcy Act relevantly concerns the stay of legal proceedings commenced by a person who subsequently becomes a bankrupt. The section provides: (1) ... (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 a member of his or her family; or (b) the death of his or her spouse or of a member of his or her family. (4A) ... (5) In this section, action means any civil proceeding, whether at law or in equity. 32 Prior to the hearing before me, an affidavit was filed by the respondents' solicitor, Ms Harvey, sworn 28 August 2007, deposing that the trustee had been served with notice of the two proceedings on 27 July 2007. The trustee was asked to advise of his election to prosecute or discontinue each of the actions within 28 days. Ms Harvey deposed that no response had been received. Accordingly, the proceedings are deemed abandoned pursuant to s 60(3). The issue is whether the applicant can continue any part of the proceedings in his own name pursuant to s 60(4). 33 At the time of the hearing of the present motions on 31 August 2007, the appeal to this Court (which led to the judgment of Madgwick J of 19 September 2007) was awaiting hearing. At the hearing before me, both parties made submissions concerning the effect of the orders of the Federal Magistrates Court. After Madgwick J's judgment was given, the parties were provided with an opportunity to make written submissions concerning the effect of that judgment on the present proceedings. Submissions were received from the applicant and the respondents. 34 The applicant's submissions, made both orally at the hearing and in written form afterwards, primarily concern the propriety and legality of the Federal Magistrate's orders of 3 August 2007. However, these proceedings do not involve a challenge to the Federal Magistrate's orders, nor were those orders challenged in the proceedings before Madgwick J: see his Honour's reasons at [33]. 35 The applicant also submitted, at the hearing, that the sequestration order has no effect on these proceedings. He indicated that he relied upon s 60(4) , although he did not elaborate on these submissions, other than to make allegations of impropriety and illegality of the various orders made by the Federal Magistrates Court. 36 The applicant's written submissions on the bankruptcy issue provided post-hearing are lengthy and contain numerous allegations of impropriety and corruption variously relating to the creditor, the trustee, the respondents' solicitors, the Federal Magistrates by whom the relevant orders were made and the judge of this Court dismissing the appeal, and the processes involved. In terms of the effect of the applicant's bankruptcy, the applicant submits that it would not be appropriate for me to adjudicate on the proceedings he has brought in this Court until "all such complaints and allegations [concerning the bankruptcy action] have been subjected to full and proper independent inquiry/investigation in the interests of justice and, the integrity of our judicial system".