Aware Ind Ltd & Ors v Robinson, David Charles [1997] FCA 571

CATCHWORDS BANKRUPTCY - Action commenced by person who subsequently becomes bankrupt - Action stayed upon bankruptcy - Action deemed abandoned 28 days after notice of action served by defendant in default of election of trustee to prosecute - Notice of action - Minimum requirements of notice. Bankruptcy Act 1966, s60(2), (3) Re Collins (1986) 10 FCR 209 Welinski v Temple (Federal Court of Australia, unreported, 8 April 1997) AWARE INDUSTRIES LIMITED, CHRISTOPHER AVERY, PETER McCLOSKEY, JAMES JOHNSON, WILLIAM STERLING and ALLAN BOUNADER v DAVID CHARLES ROBINSON VG 166 of 1997 COURT: Northrop, Davies and Sundberg JJ PLACE: Melbourne DATE: 30 June 1997

IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) No VG 166 of 1997 GENERAL DIVISION ) On Appeal from the Federal Court of Australia constituted by a single Judge BETWEEN: AWARE INDUSTRIES LIMITED, CHRISTOPHER AVERY, PETER McCLOSKY, JAMES JOHNSON, WILLIAM STERLING and ALLAN BOUNADER Appellants AND: DAVID CHARLES ROBINSON Respondent COURT: Northrop, Davies and Sundberg JJ DATE: 30 June 1997 PLACE: Melbourne MINUTES OF ORDER The Court orders that: 1. The appeal be dismissed. 2. The appellants pay the respondent's taxed costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) No VG 166 of 1997 GENERAL DIVISION ) On Appeal from the Federal Court of Australia constituted by a single Judge BETWEEN: AWARE INDUSTRIES LIMITED, CHRISTOPHER AVERY, PETER McCLOSKY, JAMES JOHNSON, WILLIAM STERLING and ALLAN BOUNADER Appellants AND: DAVID CHARLES ROBINSON Respondent COURT: Northrop, Davies and Sundberg JJ DATE: 30 June 1997 PLACE: Melbourne REASONS FOR JUDGMENT THE COURT: On 22 April 1996 the respondent commenced a proceeding against the appellants for damages and other relief ("the action"). The detail of the claim is not material to the present appeal. On 15 May the respondent became a bankrupt and the Official Receiver became trustee of his estate. As a consequence of the bankruptcy all the respondent's rights in the action vested in the trustee (s58 of the Bankruptcy Act 1966), and the action was stayed by force of s60(2). At some time between 15 May and 19 June the trustee became aware of the action. It was on 19 June that the trustee wrote to the appellants' solicitors informing them that the respondent had advised him of it. On 10 July the trustee assigned his rights in the action to the respondent pursuant to s135. On 13 November the trustee informed the appellants that he had elected to prosecute the action. On 10 January 1997 the respondent filed a notice of motion seeking a "relisting" of the action. The motion was heard by Ryan J on 20 February. Before recounting the proceedings before his Honour it is desirable to mention the provisions of the Act which form the background to the issue with which he was concerned. Section 60(2) provides An action commenced by a person who subsequently becomes a bankrupt is, upon his becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action. Sub-section (3) provides: If the trustee does not make such an election within 28 days after notice of the action is served upon him by a defendant or other party to the action, he shall be deemed to have abandoned the action. Before the trial judge the appellants contended that the action was deemed to have been abandoned by force of s60(3) at the latest on 17 July 1996, so that it was not competent for the trustee to elect to prosecute it in November 1996.