FEDERAL COURT OF AUSTRALIA Nyoni v Pharmacy Board of Australia (No 4) [2017] FCA 911 File number(s): WAD 357 of 2014 Judge(s): SIOPIS J Date of judgment: 8 August 2017 Catchwords: PRACTICE AND PROCEDURE – the applicant brought a proceeding founded on a claim that a publication was defamatory and misleading or deceptive – the applicant was subsequently declared bankrupt – whether the stay in s 60(2) of the Bankruptcy Act 1966 (Cth) applied to the proceeding brought by the applicant. Legislation: Bankruptcy Act 1966 (Cth) ss 60(2), 60(4), 60(4)(a), 116(2)(g) Cases cited: Nyoni v Pharmacy Board of Australia (No 3) [2016] FCA 1398 Sands v State of South Australia (2015) 122 SASR 195 Moss v Eaglestone (2011) 83 NSWLR 476 Berryman v Zurich Australia Ltd (2016) 310 FLR 108 Date of hearing: Determined on the papers. Date of last submissions: 14 July 2017 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 23 Counsel for the Applicant: Mr S Shepherd Counsel for the First and Third Respondents: Mr GJ Pynt Solicitor for the First and Third Respondents: MDS Legal ORDERS WAD 357 of 2014 BETWEEN: EMSON NYONI Applicant AND: PHARMACY BOARD OF AUSTRALIA First Respondent ANDREW ROBERTSON IN HIS CAPACITY AS THE DELEGATE TO THE CHIEF EXECUSTIVE OFFICER OF THE DEPARTMENT OF HEALTH Second Respondent AUSTRALIAN HEALTH PRACTITIONER REGULATION AGENCY Third Respondent JUDGE: SIOPIS J DATE OF ORDER: 8 AUGUST 2017 THE COURT ORDERS THAT: 1. The application brought by the first and third respondents, dated 9 June 2017, is dismissed. 2. The first and third respondents are to pay the applicant's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT SIOPIS J: 1 In November 2014, the applicant, Mr Emson Nyoni, commenced an application in this Court complaining about the conduct of the first and third respondents, the Pharmacy Board of Australia and the Australian Health Practitioner Regulation Agency respectively (the respondents), in publishing material on the internet which he alleged impugned his reputation and was misleading or deceptive. Mr Nyoni contended that the publication gave rise to three causes of action and he relies upon those causes of action in a proceeding which is pending in this Court. The causes of action are defamation, misleading or deceptive conduct in contravention of the Australian Consumer Law (the ACL), and malicious falsehood. Mr Nyoni claims compensation and injunctive relief. 2 On 17 February 2017, a sequestration order was made against the estate of Mr Nyoni by the Federal Circuit Court of Australia. 3 On 9 June 2017, after becoming aware of the sequestration order which was made against Mr Nyoni, the respondents filed this interlocutory stay application. The respondents rely upon s 60(2) of the Bankruptcy Act 1966 (Cth) to seek an order that Mr Nyoni's claims founded on the contravention of the ACL and the tort of malicious falsehood be stayed. The respondents do not seek an order staying Mr Nyoni's claim in defamation. 4 Mr Nyoni is a registered pharmacist. In 2013, he was convicted in the Magistrates Court of Western Australia of certain offences based on deficiencies in the way in which he stored and maintained a register of addictive, so-called "Schedule 8", drugs under the regime imposed by the Poisons Act 1964 (WA) and regulations. As a result of the convictions, Mr Nyoni's authority to deal with Schedule 8 drugs was revoked by the Department of Health of Western Australia. 5 Subsequently, in late 2013, the Pharmacy Board of Australia imposed nine conditions on Mr Nyoni's registration as a pharmacist. Both the fact of the imposition of the conditions and the nine conditions were published by the third respondent on its website. 6 Condition 1 was of particular concern to Mr Nyoni because in its terms it prohibited him from "taking or self administering Schedule 8 drugs, save for those that may be legally prescribed for him". 7 As mentioned in Nyoni v Pharmacy Board of Australia (No 3) [2016] FCA 1398 at [6], the gravamen of Mr Nyoni's complaint against the respondents is that: [T]he prominence of the first condition at the head of the other conditions would cause a reasonable reader of the third respondent's webpage entry to entertain the impression that the other conditions were related to, and had been imposed, consequent upon Mr Nyoni having been found guilty of improperly or unlawfully taking or self-administering the Schedule 8 drugs or because he was an addicted drug taker. 8 In relation to the imputations described above, Mr Nyoni has submitted that "the primary allegation is that the conduct…diminished [his] professional and personal reputation in the eyes of third parties" and that he has "suffered hurt feelings, distress, a loss of personal and professional reputation, and impairment to his earning capacity". 9 I observe in passing that on 24 July 2015, condition 1 and another condition were removed from Mr Nyoni's registration and the information on the third respondent's website was updated accordingly. 10 As mentioned, in seeking redress for his alleged loss, Mr Nyoni relies on three causes of action, namely, misleading or deceptive conduct, defamation, and malicious falsehood. 11 By a letter, dated 13 June 2017, addressed to a Registrar of the Federal Circuit Court, Mr Nyoni's trustee in bankruptcy, Ms Joyce, stated that in her view, "if successful, any damages awarded to Mr Nyoni would not vest in the Bankrupt Estate in accordance with Section 116(2)(g)(i) of the Act". 12 Sections 60(4) and 116(2)(g) of the Bankruptcy Act are complementary provisions which serve to protect a bankrupt's right to compensation for personal injury or wrong from his or her creditors. 13 Section 60(2) of the Bankruptcy Act provides that upon a person becoming a bankrupt, any action commenced by that person is stayed until the trustee makes an election in writing to prosecute or discontinue the action. 14 That subsection is qualified by s 60(4) which states: (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… 15 Section 116(2)(g)(i) of the Bankruptcy Act operates to exclude from the property which is to be divisible among creditors any right of the bankrupt to recover damages or compensation for personal injury or wrong done to the bankrupt. 16 The respondents contended that the Court was not bound by the views of the trustee in bankruptcy. The respondents accept that Mr Nyoni's claim in defamation falls within the ambit of s 60(4)(a) of the Bankruptcy Act as it is an action commenced by him before he became bankrupt in respect of a "personal injury or wrong" done to him. Further, the respondents accept that there is no bifurcation between the damage compensated for under that cause of action for his injured feelings, loss of reputation and impairment of dignity on the one hand and economic loss on the other hand (Sands v State of South Australia (2015) 122 SASR 195 at [137]). However, the respondents contend that the claims of malicious falsehood and the statutory claim under the ACL do not fall within s 60(4)(a) because those claims compensate for economic loss. Therefore, contended the respondents, the claims made under each of those causes of action are stayed by reason of s 60(2) of the Bankruptcy Act. 17 In Moss v Eaglestone (2011) 83 NSWLR 476 (Moss) at [65], Allsop P (as his Honour then was) referred to s 60(4) and s 116(2)(g) of the Bankruptcy Act as reflecting a distinction between property and person, and observed: The terms of s 60(4) (and s 116(2)(g)) reflect that distinction of substance. The words "action commenced by him or her…in respect of any personal injury or wrong done to [him or her]" require the substance of the matter to be examined. 18 In that case, the New South Wales Court of Appeal considered whether the claim against a solicitor for professional negligence brought by a bankrupt fell within s 60(4)(a). The claim was that the solicitor had failed to commence an action for defamation which he had been retained to bring on behalf of the bankrupt. The Court of Appeal found that the substance of the claim was for compensation in respect of the harm arising from the alleged defamation, and that when regard was had to the substance of the matter and the statutory intent, it was apparent that the claim fell within the ambit of s 60(4)(a) of the Bankruptcy Act. 19 In Berryman v Zurich Australia Ltd (2016) 310 FLR 108 (Berryman), Tottle J followed the approach in Moss. 20 In Berryman, the plaintiff sued to enforce an insurance policy, which provided for a monetary benefit in the event that he became totally and permanently disabled. Tottle J rejected the defendant insurance company's argument that the plaintiff sued to enforce a contractual right and that the plaintiff's remedy was to be estimated by reference to the policy rather than by reference to his physical injury. 21 In Berryman, Tottle J observed as follows at [74]: In Moss v Eaglestone Allsop P emphasised the necessity to have regard to the substance of the matter rather than the form of the action. Kiefel J made the same point in Re Dosanjh; Ex parte Duus by drawing attention to the real enquiry, that is, whether the monies were payable as compensation for the injury or wrong done…Provided that there is a relation between the amount of compensation and the nature of the injury, neither the fact that the claim is contractual in nature nor that it is for a fixed amount, negate the essential character of the payment as compensation for injury. 22 In this proceeding, the substance of Mr Nyoni's claim is that the imposition of condition 1 created the impression that he had been found guilty of improperly taking or self-administering Schedule 8 drugs or that he was an addicted drug taker. As a result, Mr Nyoni claims to have suffered loss primarily in relation to his personal and professional reputation and his earning capacity as a pharmacist. The substance of the matter is, in my view, in the nature of a "personal injury or wrong done to the bankrupt". That conclusion is not changed by the fact of Mr Nyoni seeking to rely on three separate causes of action to vindicate the harm arising from the personal wrong which he alleges he has suffered. 23 Accordingly, the respondents' application, dated 9 June 2017, is dismissed. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate: Dated: 8 August 2017