aoe - JUDGMENT Now Aol Dy mene IN_THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) QLD BN798 of 1984 BANKRUPTCY DISTRICT OF THE SQUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ~ RE: FREDERICK JOSEPH LORY and THE TRUSTEE OF THE PROPERTY OF FREDERICK JOSEPH LORY Bankrupt EX PARTE: HAROLD FREDERICK STEVENS Applicant MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 3 SEPTEMBER 1987 WHERE MADE: SYDNEY THE COURT ORDERS THAT: The applicant have leave to commence proceedings in the Supreme Court of Queensland against Frederick Joseph Lory by writ in or substantially in the form marked "A" annexed to the affidavit of Peter John Luscombe filed herein. Settlement and entry of orders is dealt wi Rule 124 of the Bankruptcy Rules. — FEDERAL COURT 1 . AUSTRALIA OF IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION ~~ QLD BN798 of 1984 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: FREDERICK JOSEPH LORY and THE TRUSTEE OF THE PROPERTY OF FREDERICK JOSEPH LORY Bankrupt EX PARTE: HAROLD FREDERICK STEVENS Applicant PINCUS J. 3 SEPTEMBER 1987 REASONS FOR JUDGMENT The applicant, who desires to start proceedings in the Supreme Court of Queensland against the bankrupt, Mr. F.J. Lory, seeks leave to do so pursuant to s.58(3)(b) of the Bankruptcy Act 1966. The proceedings which the applicant desires to institute in that Court are for damages for negligence, negligent misstatement, breach of fiduciary duty, fraud and fraudulent misrepresentation. The relevant parts of s.58(3) read as follows: "Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor - (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt The first question is whether the proposed proceedings are "in respect of a provable debt". Section 82(2) of the Act provides: "Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy. " It is necessary, then, to determine whether all or any of the proposed claims are excluded from the concept of a "provable debt" by virtue of this section. The damages proposed to be claimed are specified in the papers as an amount of $204,850.69; there is also a claim for exemplary and aggravated damages. Details of the calculation of the former sum are provided. It seems clear, however, that despite this quantification, damages are wholly unliquidated. The figures I have mentioned are merely evaluation of the damages: see per Wickham J. in Cornelius v. Barewa Oil & Mining (NL) (in liq) 42 A.L.R. 83 at pp.89, 90. The next question is whether the damages arise otherwise than by reason of a contract, promise or breach of trust. The authorities suggest that the words "contract, promise or breach of trust" in the section are capable of including actions which are not by any means evidently within any of those concepts. In Jack v. Kipping (1882) 9 Q.B.D. 113 and Tilley v. Bowman, Limited C1910] 1 K.B. 745, a claim in deceit was treated as arising out of a contract of sale for the purposes of set-off. However, inthe latter case Hamilton J. followed the former with a marked lack of enthusiasm and in Re Mid-Kent Fruit Factory (18963 1 Ch. 567, Vaughan Williams J. rather read the case down (p.572-573). I find it difficult to understand precisely how a claim in deceit can be regarded as one arising by reason of a contract, but do not think it necessary to form a concluded view on the question whether claims of that kind may ever be regarded as excluded from s.82. Here, according to the pleading, there was a contract involved, but I am at best doubtful whether any of the claims arise by reason of it. It appears to me that the practical course is not to require the prospective plaintiff to pursue his claim in this court, but rather to give the leave sought. The application for leave will therefore be granted. 4 certify that this and the et preceding pages are a true cosy of ine reasons for judgment herein of His Honour Mr. Justice Pincus LE OOF Associate Dated 3 September \Qe7