CITATION: O'Sullivan v Sydney South West Area Health (formerly Central Sydney Area Health Service) (No 3) [2005] NSWADT 299 This decision has been amended. Please see the end of the decision for a list of the amendments. DIVISION: Equal Opportunity Division APPLICANT PARTIES: Dr Brendan O'Sullivan RESPONDENT Sydney South West Area Health (formerly Central Sydney Area Health Service) FILE NUMBER: 031122; 051099 HEARING DATES: 26/09/05 SUBMISSIONS CLOSED: 09/26/2005 DATE OF DECISION: 12/16/2005 BEFORE: Grotte E - Judicial Member; Bolt M - Non Judicial Member; Nemeth de Bikal L - Non Judicial Member APPLICATION: Competency of party MATTER FOR DECISION: Preliminary matter Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Anti-Discrimination Act 1977 Bankruptcy Act 1966 (Cth) Commissioner of Police, NSW Police Service –v- Estate Edward John Russell & Ors [2001] NSWSC 745 Forster –v- Jododex Australia Pty Ltd & Another 1972 127 CLR 421 CASES CITED: Knaggs –v- Solicitors' Statutory Commission (No.2) 27 NSWLR 603 National Parks and Wildlife Service –v- Stables Perisher Pty Ltd (1990) 20 NSWLR 573 O'Sullivan –v- Central Sydney Area Health Service [2005] FMCA 968 APPLICANT REPRESENTATION: C Murtough, barrister RESPONDENT A Moses, barrister ORDERS: 1. Applicant's application for a preliminary hearing ruling as to his capacity to sue is dismissed; 2. Applicant's application that the Respondent pay the Applicant's costs of these proceedings is reserved. REASONS FOR DECISION Background 1 On 18 October 2002 Dr Brendan O'Sullivan (the Applicant) lodged a complaint with the Anti-Discrimination Board against the Central Sydney Area Health Service (CSAHS) (the Respondent). Dr O'Sullivan alleged that he had been discriminated against during his employment with the Respondent in that he had been forced to resign at a time of documented illness. Dr O'Sullivan claimed that the Respondent sequestered over $77000 of sick leave and long service entitlements during the same period of illness. Dr O'Sullivan claimed that the acts of discrimination were committed from 4 June 2000 to 3 October 2002. 2 The complaint referred to the Tribunal by the Anti Discrimination Board (ADB) concerns alleged acts of discrimination between 4 June 2000 and 3 October 2002. 3 On 22 April 2003 Dr O'Sullivan was made bankrupt by Order Number 1923 of 2003/9. He has not been discharged and the trustee of his bankrupt estate is the Official Trustee in Bankruptcy. 4 Section 60 of the Bankruptcy Act 1966 (Cth) relevantly provides that: 60(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 … … (5) In this section, action means any civil proceeding, whether at law or in equity. 5 Section 116 of the Bankruptcy Act deals with property, which is identified as being divisible amongst the creditors of the bankrupt. It relevantly provides: 116(1) Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his discharge or her discharge; (b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; (c) property that is vested in the trustee of the bankrupt's estate by or under an order under section 139(D); and (d) money that is paid to the trustee of the bankrupt's estate under na order under section 139E; is property divisible amongst the creditors of the bankrupt. 6 Subsection 116(2) identifies property, which is excluded from subsection (1) and is not property divisible amongst the creditors. Subsection 116(2)(g)(i) provides that "any right of the bankrupt to recover damages or compensation for personal injury or wrong done to the bankrupt" is excluded from being property which is divisible amongst the creditors. 7 On 3 November 2004 Counsel for the Applicant wrote to the Insolvency and Trustee Service Australia (ITSA) informing it that Dr O'Sullivan had brought proceedings against the Respondent in relation to discrimination and employment issues. Advice was sought as to whether Dr O'Sullivan, as an undischarged bankrupt, was competent to pursue those proceedings and whether it was necessary to disclose his bankruptcy to the Court/Tribunal and/or the Respondent's legal representatives. 8 On 8 November 2004 ITSA responded by advising that "pursuant to section 116(2)(g) of the Bankruptcy Act 1966 the bankrupt is entitled to pursue his former employer Central Sydney Area Health Service in relation to discrimination and employment issues. Any payout for damages or compensation recovered by the bankrupt in respect of an injury or wrong done to the bankrupt is protected property pursuant to the abovementioned section and therefore do not vest with the trustee. However, money relating to unpaid long service leave and/or annual leave is considered as income and therefore will need to be included in the bankrupt's relevant contribution assessment period. Accordingly, the bankrupt does not have to disclose to the Court/Tribunal or any other legal representatives that he is an undischarged bankrupt". 9 On 13 May 2005 the Respondent's legal representatives wrote to the Applicant's Counsel informing him that it had come to their attention that Dr O'Sullivan was an undischarged bankrupt. The Respondent's legal representatives requested advice as to whether, in light of section 58 and 116(1) of the Bankruptcy Act 1966, Dr O'Sullivan intended to discontinue the proceedings in relation to the unfair dismissal matter and the employment dispute. 10 On 26 May 2005 Counsel for the Applicant wrote again to ITSA stating that the Respondent contended that Dr O'Sullivan is not competent to pursue these proceedings as he is an undischarged bankrupt. Counsel for the Applicant sought advice from ITSA as to how the issue might be resolved. On 26 May 2005 ITSA responded that "the trustee remains of the view that the right of action is protected pursuant to the provisions of section 116(2)(g) of the Bankruptcy Act 1966, and does not vest in the trustee. Accordingly, your client is entitled to continue the action in his own right. Should there be any doubt as to your client's right to prosecute the litigation, the Federal Magistrates Court has jurisdiction to resolve the matter." 11 On 5 July 2005 solicitors for ITSA wrote to the Applicant's solicitors in response to correspondence from the Applicant's solicitors dated 29 June 2005. ITSA's solicitors stated that "a matter of concern to our client [ITSA] is the apparent reliance your client is placing on our client's letters dated 8 November 2004 and 26 May 2005, particularly in light of the general nature of the enquiry that was made of our client which the letters were written in response to." Additionally, ITSA's solicitors stated that no details or particulars of the claim or any documentation had been provided to ITSA and it was against this background that ITSA had written its letter regarding the proceedings. 12 An Application was brought by the Applicant in the Federal Magistrates Court seeking to invoke that Court's bankruptcy jurisdiction conferred by section 27 of the Bankruptcy Act (Cth). The Applicant was seeking declaratory orders under section 30 of the Bankruptcy Act confirming his legal competence to continue proceedings in the Tribunal, commenced before he became an undischarged bankrupt, in relation to all or part of the relief he seeks. 13 Federal Magistrate Smith stated that, although there was an argument concerning jurisdiction to give the relief sought by the Applicant, he was "inclined to consider that the court does have jurisdiction to make the declaratory orders which determine disputes as to the effect of s.60 of the Act upon current proceedings being conducted by a bankrupt in another forum". However Federal Magistrate Smith did not consider that "giving the relief is either appropriate or necessary to assist the administration of the bankrupt estate of the applicant. In so far as it might assist the parties currently litigating before the ADT to have rulings as to the effect of the Bankruptcy Act, I consider that such rulings are more appropriately given by the ADT". Federal Magistrate Smith stated at paragraph 58 of his decision dated 18 July 2005 "Counsel for the applicant has not persuaded me that the ADT lacks power to rule upon the issues, and as I have explained above, I consider that it does. It is a body with judicial powers, and must have power to address matters going to its own jurisdiction, and, in particular the standing or competence of an applicant before it to pursue the heads of relief he seeks". Relief Sought by the Applicant in this Application 14 Dr O'Sullivan seeks a final and definitive determination of his entitlement to pursue his claim against the Respondent pursuant to sections 49, 50, 108 and 110 of the Anti Discrimination Act 1977 (ADA) and a declaration as to any limitation upon any claim pursued by the Applicant as presently pleaded or subsequently amended pursuant to the provisions of sections 49, 50, 108 and 110 of the ADA. Submissions on behalf of the Applicant 15 It was submitted on behalf of the Applicant that the Applicant is an undischarged bankrupt and that he seeks relief as to his competence to maintain the present proceedings, which he commenced in this Tribunal prior to becoming an undischarged bankrupt. It was submitted that the Respondent had raised the Applicant's standing as an issue and that as the Tribunal is aware of the Applicant's status as an undischarged bankrupt, it has a legal responsibility to consider what impact his status has on the continuation of these proceedings and whether the Applicant's bankruptcy prevents, limits or restricts the relief he can seek in the proceedings before the Tribunal. 16 It was submitted on behalf of the Applicant that since at least 13 May 2005 the Respondent has challenged the standing of the Applicant to maintain the proceedings in the Tribunal and that therefore this issue needs to be resolved. It was submitted on behalf of the Applicant in the submissions to the Federal Magistrates Court that the First Respondent, being the Respondent in the proceedings in this Tribunal, "has been formally requested by letters 13 May 2005, 20 May 2005 and 14 June 2005 to disclose to the Applicant the precise legal and factual basis upon which the First Respondent seeks to stay and/or dismiss either wholly or in part the Complainant's proceedings in the Administrative Decisions Tribunal or to assert that the Applicant/Complainant is not competent to continue to pursue those proceedings. The First Respondent has to date neglected, failed and/or refused to respond to such requests for information and/or particulars. The Applicant therefore does not know the basis upon which the First Respondent asserts that the Applicant/Claimant lacks the standing to pursue the extant proceedings in the Administrative Decisions Tribunal in proceedings number 1320 of 2002". 17 It was submitted on behalf of the Applicant that the nature of the relief sought pursuant to section 108(2)(a) of the ADA falls within the exclusions provided by section 116(2)(g) of the Bankruptcy Act 1966. It was submitted that the very nature of the proceedings brought under the ADA are that personal injury and/or distress and/or injured feelings are generally alleged. Submissions on behalf of the Respondent 18 It was submitted on behalf of the Respondent that the relief sought by the Applicant is imprecise and is essentially an inappropriate broad judicial pronouncement on the rights of the Applicant to pursue the present claim and any future amendment. It was submitted that no consideration has been given to the impact that such a pronouncement will have on third parties and their rights. It was submitted that the Applicant has failed to identify the jurisdiction of the Tribunal to make declarations. It was submitted that the relief sought fails to identify the heads of compensation, which will be claimed and in those circumstances it remains premature to grant the relief sought by the Applicant. 19 It was submitted by the Respondent that, if the Tribunal considers that it is not premature to consider the Applicant's standing to maintain the proceedings, then the proceedings should be dismissed or permanently stayed. It was submitted that the relevant relief sought by the Applicant in these proceedings is necessarily contract based and therefore does not fall within the exception set out in section 116(2)(g) of the Bankruptcy Act. The real issue is whether there is any claim in the nature of damages, which could be "estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property." Reasons for Decision 20 This Tribunal is a statutory Tribunal, which has limited jurisdiction. It is constituted by the Administrative Decisions Tribunal Act 1997 (ADT Act), which defines its jurisdiction to conduct merits reviews of administrative decisions and also, amongst other things, determine civil claims in the Equal Opportunity Division of the Tribunal. The ADT Act not only establishes the Tribunal but it also sets out its functions and powers. The Tribunal sitting in the Equal Opportunity Division is also conferred powers by the Anti Discrimination Act 1977. 21 There is authority for the proposition that the Tribunal when sitting in the Equal Opportunity Division exercises judicial power and could be construed to be a court (see discussion in Trust Company of Australia Ltd [Stockland Property Management Ltd] –v- Skiwing Pty Ltd trading as Café Tiffany's [RLD] (2) NSWADT AP 9 and in Australian Postal Commission –v- Dao (No.2) 1986). However, this does not mean that the general powers available to a court are necessarily imported to the Tribunal. The Tribunal being a creature created by statute is limited by the powers conferred by the relevant statutes. As Kirby P (as he then was) stated in National Parks and Wildlife –v- Stables Perisher (1990) 20 NSWLR 573 at page 585: The Land and Environment Court is a superior court of record. But it is a statutory court of limited jurisdiction. It is therefore inevitable that, in marking out the limits of its jurisdiction a point will be reached where jurisdiction ends. When that happens, that court must refrain from purporting to exercise jurisdiction. It must do so however inconvenient it might be to the litigants, frustrating to the members of that court seeking to do justice in the case and even seemingly irrational in the efficient deployment of scarce public resources for the resolution of disputes by litigation. If the court purports to exercise a jurisdiction which it does not in law have, it is the duty of this Court, upon application, upholding the rule of law, to invalidate any assertion of jurisdiction which does not lawfully exist….In the case of a court created by statute, it [jurisdiction] must be found, expressly stated or implied in the language of the statute. 22 Section 108 of the ADA confers on the Tribunal the power to dismiss a complaint in whole or in part or to find a complaint substantiated in whole or in part. If the Tribunal finds a complaint substantiated in whole or in part it may award damages or make orders redressing the unlawful conduct. Section 108(2)(f) is the only declaratory order available to the Tribunal, but it is specifically in relation to "declaring void in whole or in part and either ab initio from such time as is specified in the order any contract or agreement made in contravention of this Act or the regulations". 23 Having considered carefully the powers conferred by both the ADT Act and the ADA, the Tribunal is satisfied that there is no provision, either expressly or impliedly stated, which enables the Tribunal to make the kind of declaratory orders being sought by the Applicant. 24 Section 102 of the ADA provides that the Tribunal may "at any stage in proceedings relating to a complaint, dismiss the whole or any part of the complaint on a ground on which the President may decline the whole or any part of a complaint under section 92(1)(a)(i) or (ii) or (b). 25 Section 92(1)(a)(i) and (ii) of the ADA provide that the President may decline a complaint during investigation "if at any stage of the President's investigation of a complaint, the President is satisfied that the complaint, or part of the complaint, is frivolous, vexatious, misconceived or lacking in substance, or the conduct alleged, or part of the conduct alleged, if proven, would not disclose the contravention of a provision of this Act or the regulations. Section 92(1)(b) provides that the President may also decline a complaint during an investigation if the President is "satisfied that for any other reason no further action should be taken in respect of the complaint, or part of the complaint". 26 Accordingly, the Tribunal has the same powers to decline a complaint as the President has conferred on him by section 92(1)(a)(i) and (ii) and (b). 27 The Tribunal does, pursuant to section 102 of the ADA, have the power to entertain an application to dismiss a complaint on the ground that the Applicant, as an undischarged bankrupt, was not competent to pursue his cause of action. The Tribunal agrees with the decision of Federal Magistrate Smith that it has jurisdiction to do so and that it is appropriate, if an application were made to the Tribunal, for the Tribunal to make such findings and rulings (O'Sullivan –v- CSAHS [2005] FMCA 968; Forster –v- Jododex Australia Pty Ltd & Anor [1972] 127 CLR 421). However the Tribunal does not have such an application before it and accordingly, cannot make findings and rulings in the absence of such an application. The Tribunal, at present, has an application made on behalf of the Applicant to essentially pronounce and declare the Applicant as competent to pursue his complaint. 28 The Tribunal has also considered whether it should, of its own motion pursuant to section 92(1)(b), decline Dr O'Sullivan's complaint because it is "satisfied that for any other reason [being an undischarged bankrupt] no further action should be take in respect of the complaint". The purpose of this section is to confer on the Tribunal a broad power to decline a complaint, in whole or in part, if it is satisfied that it should do so. The Tribunal however, is not satisfied that these proceedings, either in whole or in part, should be declined pursuant to section 92(1)(b) on that basis. 29 Accordingly, as stated above the Tribunal is unable to make any order with respect to this Application. Costs 30 The Applicant's legal representatives also submitted that because the bankruptcy issue was raised by the Respondent, the Tribunal ought to exercise its discretion to order (i) the Respondent pay all of the Applicant's costs of an incidental to the bankruptcy proceedings including the Applicant's costs in the Federal Magistrate Court and (ii) an indemnity for any costs ordered to be paid by the Applicant to the Respondent by the Federal Magistrate Court in those proceedings. 31 The Respondent submits that the question of costs should be reserved pending the Tribunal's determination. It also submitted that the effect of the costs order sought by the Applicant is an attempt to overturn the effect of a potential costs order, which may be made by the Federal Magistrate Court and that the Tribunal should not make such an order as it would interfere with another court's jurisdiction. 32 The Tribunal agrees with the Respondent's submission that the Tribunal should not interfere with any potential order that may be made by the Federal Magistrate Court and it considers that it is appropriate for the question of costs regarding the Tribunal's proceedings to be reserved pending the final determination of the discrimination proceedings. Orders 1. Applicant's application for a preliminary hearing ruling as to his capacity to sue is dismissed 2. Applicant's application that the Respondent pay the Applicant's costs of these proceedings is reserved. 19/12/2005 - to clarify Orders made - Paragraph(s) Orders DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.