Supreme Court New South Wales Medium Neutral Citation: Anthony Murdaca v Vincent Pizzinga [2013] NSWSC 396 Hearing dates: 19 November 2012 Decision date: 26 April 2013 Before: Bellew J Decision: 1.The proceedings are dismissed. 2.The plaintiff is to pay the defendant's costs Catchwords: PRACTICE AND PROCEDURE - application to dismiss proceedings - plaintiff bringing action for negligence against former solicitor - plaintiff previously bankrupt - whether plaintiff's right to bring proceedings against solicitor was property which vested in his trustee upon the making of the sequestration order - whether such right was re-assigned to the plaintiff by the trustee - whether plaintiff's action for personal injury was maintainable on the basis that it was independent of his property rights - proceedings not maintainable by the plaintiff - proceedings dismissed Legislation Cited: Bankruptcy Act 1966 Civil Liability Act 2002 (New South Wales) Conveyancing Act 1919 Limitation Act 1969 (New South Wales) Cases Cited: Batistatos v Roads and Traffic Authority of NSW [2006] HCA 27; (2006) 227 ALR 425 Charles Forte Investments Ltd v Amanda [1964] Ch 240 Cox v Journeaux and Ors [No 2] [1935 HCA 48; (1935) 52 CLR 713 General Steel Industries Inc v Commissioner for Railways New South Wales [1964] HCA 69; (1964) 112 CLR 125 Daemar v Industrial Commission of New South Wales and Ors (1988) 12 NSWLR 85 Daemar v Industrial Commission of New South Wales and Anor [No 2] (1990) 22 NSWLR 178 Gunns v Marr [2005] VSC 251 Mannigel v Hewlett Phelps [1991] NSWCA 186 Murdaca v RAMS Mortgage Corporation Limited [2007] NSWSC 512 Norman v Federal Commissioner of Taxation [1963] HCA 21; (1963) 109 CLR 9 Pegler v Dale (1975) 1 NSWLR 265 Piwinski v Corporate Trustees of the Diocese of Armidale (1975) 1 NSWLR 265; (1975) 6 ALR 62) Shelton v National Roads and Motorists Association Limited (2004) 51 ACSR 278 Category: Procedural and other rulings Parties: Anthony Murdaca - Plaintiff / Applicant Vincent Pizzinga - Defendant / Defendant Representation: Mr L Robison - Plaintiff / Respondent Mr P Arblaster - Defendant / Applicant Colin Biggers and Paisley - Defendant / Applicant Self represented - Plaintiff/Respondent File Number(s): 2011/362962 Publication restriction: Nil Judgment INTRODUCTION 1Before the court for determination is a notice of motion filed by the defendant on 14 May 2012. Although the notice of motion contains a number of prayers for relief, the orders sought in the hearing before me were limited to those set out in paragraphs (1), (2) and (3) which were in the following terms: (1)that the proceedings be dismissed pursuant to r 13.4 of Uniform Civil Procedure Rules 2005 ("the rules"); (2)alternatively to order (1), an order that summary judgment be given in favour of the defendant pursuant to the inherent jurisdiction of the court; (3)alternatively to orders (1) and (2), an order that the statement of claim be struck out pursuant to r 14.28 of the rules. 2The plaintiff opposes the making of the orders sought. THE PRINCIPAL PROCEEDINGS 3The defendant is the plaintiff's former solicitor. By a statement of claim filed on 14 November 2011, the plaintiff seeks damages arising out of the defendant's representation of the plaintiff in proceedings which were brought against him in this court in 1988. 4The statement of claim was prepared by the plaintiff without legal assistance. As a consequence, and without wishing to be unduly critical of the plaintiff, it is inelegantly pleaded and contains a number of assertions which would seem to be irrelevant. However, for present purposes the nature of the plaintiff's case may be summarised as follows. 5In or about 1996, the plaintiff granted a mortgage over a property at Moorebank in order to obtain finance to undertake a property development involving the construction of a number of townhouses. It appears that the plaintiff subsequently defaulted under the terms of the mortgage, resulting in the mortgagee commencing proceedings against him in this court seeking orders for (inter alia) possession of the property over which the mortgage was held ("the possession proceedings"). The defendant acted for the plaintiff in the possession proceedings. 6On 18 May 1998 orders were made in the possession proceedings, including an order that the mortgagee have leave to issue a writ of possession. In this regard, paragraph (13) of the statement of claim is pleaded in the following terms: "The defendant acted illegitimately and carelessly in a court appearance when he misled the parties and the court to believe that the plaintiff was consensual (sic) to the court orders made on 18-05-98. The orders were to the detriment of the plaintiff and favourable to the mortgagee and to the interests of a third party who want to buy the development in lot (7)." 7Paragraph (14) of the statement of claim pleads that the making of those consent orders was without instructions and that this "caused the plaintiff to suffer shock and trauma at the time when the sheriff entered his home / property with the writ of possession". The statement of claim goes on to plead, at various stages, that the plaintiff was "badly advised and deceived by the defendant" and that the defendant's conduct was "illegal and malicious". 8The statement of claim then pleads (at paragraph (17)) that it was not until 8 June 2011 that the plaintiff became aware of the consent orders which had been made in 1998 and (at paragraph (19)) that the negligence of the defendant in 1998 caused an impairment of the plaintiff's health which was said to have been brought about by the "humiliation and loss of self-respect in seeing (the plaintiff's) project being completed by someone else in 1999". The suggestion that the plaintiff was aware, as early as 1999, that the development was being completed by some person other than himself does not sit entirely comfortably with the proposition that he did not become aware of the consent orders made in the possession proceedings until June 2011. 9The relief which is claimed by the plaintiff in the statement of claim is twofold, namely: (a)an order that the defendant pay "compensatory damages" for causing mental and physical injury to the plaintiff; and (b)an order that the defendant "compensate the plaintiff for suffering the financial loss" which is pleaded in the statement of claim, such financial loss allegedly arising from the fact that the plaintiff lost the opportunity to complete the development. 10An amended defence was filed on 24 July 2012. That defence places squarely in issue the allegation that the defendant acted negligently in respect of the making of the orders of 18 May 1998, and pleads that such orders were made on the express instructions of the plaintiff. Moreover, the amended defence raises a number of specific defences to the plaintiff's cause of action, including an assertion that it is statute barred having regard to the provisions of the Limitation Act 1999. It is not necessary, for present purposes, to further detail the other issues which are raised by the amended defence. THE EVIDENCE ON THE HEARING OF THE MOTION 11The defendant read, without objection, paragraphs (1) and (2) of the affidavit of Melissa Fenton 4 June 2012, along with a further affidavit of Ms Fenton sworn on 3 September 2012. 12The plaintiff tendered two documents (which became exhibit 1), being a letter from the plaintiff to a Mr Porter of 28 November 2011, along with Mr Porter's reply of 23 December 2011. In addition, the plaintiff read (without objection) his affidavit of 29 August 2012 along with his affidavit of 24 September 2012. Each of those affidavits was lengthy and I have referred further below to those particular parts to which the court was taken for the purposes of the hearing of the motion. THE RELEVANT FACTS 13The affidavit material to which I have referred establishes the following facts which are relevant to the determination of the motion. 14On 29 September 2006, a sequestration order was made against the plaintiff in the Federal Court of Australia. Ian Charles Francis and Jason Lloyd Porter were appointed trustees of the plaintiff's estate. The plaintiff was discharged from bankruptcy on 27 October 2009 (annexure "A" to the affidavit of Ms Fenton sworn 4 June 2012) 15On 28 November 2011 the plaintiff wrote to Mr Porter (part of exhibit 1) in the following terms: Please find enclosed a copy of my statement of claim filed in the Supreme Court File No. 2011/362962 and please inform me of the following: 1.Do you have an interest in the financial loss part of my claim and if so, what is the amount that you require from any compensation amount if awarded in my favour for my financial loss? 2.Should you be added as a party to the proceeding? 3.What is the procedure in having the financial loss part of my claim assigned to myself? 16On 23 December 2011, Mr Porter responded (part of exhibit 1): I refer to your letter dated 28 November 2011. I confirm the following:- 1.I have no interest in the proceedings; 2.I should not be added as a party to the proceedings; and 3.Your claim appears to be compensation in relation to a personal injury claim and thus is not divisible amongst the creditors pursuant to section 116(2)(g) of the Bankruptcy Act 1966. Accordingly, there is no claim vesting in me to assign to you. 17On 16 July 2012 the plaintiff again wrote to Mr Porter (Annexure "G" to the plaintiff's affidavit of 29 August 2012) as follows: As you know, I am the plaintiff in the Supreme Court proceedings No. 2011/362962. I confirm that I previously provided to you with (sic) a copy of my statement of claim herein and you indicated that you did not consider that the right to sue had vested in you in your capacity as my former trustee because of the personal injury of the proceedings: see you letter dated 13 December 2011. Notwithstanding your letter, an issue has arisen as to whether I am entitled to bring the proceedings referred to above. This is in part due to the non-personal injury aspects of my claim. Therefore I respectfully request that you execute the attached deed which merely seeks to confirm that no chose in action to sue is vested in you. I enclose a deed executed by me and ask that you execute the same and return it to me as soon as possible. 18The Deed which was referred to in the plaintiff's letter (which is annexure "H" to the same affidavit) recited the fact that Mr Porter was the plaintiff's former trustee, that he had perused and considered the statement of claim filed by the plaintiff, and that he at no stage claimed any interest in the proceedings. The deed then purported to confirm: (a) the assignment, by Mr Porter to the plaintiff, of "all interests in the proceedings (if any)"; and (b) that such assignment was to "take effect as of the discharge of the bankruptcy". 19The plaintiff then forwarded an email to Mr Porter on 7 August 2012 (annexure "I" to the plaintiff's affidavit of 29 August 2012) which was in the following terms: Please find attached my letter to you dated 16-07-2012; please inform in the near future if you intend to execute the Deed of assignment. 20On 31 August 2012, Mr Porter responded to the plaintiff (part of annexure "A" to the affidavit of Ms Fenton sworn on 3 September 2012) in (inter alia) the following terms: "I reaffirm my previous position that I have no interest in these proceedings. You have demanded that I sign the proposed Deed enclosed with your letter. Your letter states that the proposed Deed 'merely seeks to confirm that no chose in action to sue vested in you'. However, clause 1 of your proposed Deed states 'Jason Porter hereby assigns all interests in the proceedings (if any) to Anthony Murdaca'. Clearly your letter and proposed Deed are contradictory. For the avoidance of doubt, I do not agree with your proposed Deed, nor will I be signing it. You were discharged from bankruptcy on 27 October 2009, some three years, ago, and commenced these proceedings in 2011. I advised you on 23 December 2011 that I had no interest in these proceedings and I made it clear that I did not assign a vested action to you (if any exists). My position has not changed. If you believe that you have a personal injury claim, then that is entirely a matter for you. There is no benefit to you (sic) bankrupt estate and creditors generally". 21On the same day, Mr Porter wrote to Ms Fenton (part of Annexure "A" to Ms Fenton's affidavit sworn on 3 September 2012) in (inter alia) the following terms: "In respect of Mr Murdaca's claim that my letter dated 23 December 2011 amounts to an assignment of the chose in action back to him. I deny this claim and do not interpret it as an assignment. If any action has vested, it has not been assigned to Mr Murdaca. I confirm that I have received a letter and proposed Deed from Mr Murdaca dated 16 July 2011 demanding that I execute same. I advise that I have not executed the Deed, nor do I intend to do so". 22On 20 July 2012 Dr Yolanda Lucire, a Forensic Psychiatrist, examined the plaintiff for the purposes of assessing the plaintiff's mental state between 1997 and 2012. Dr Lucire subsequently provided a report dated 17 August 2012 (annexure "A" to the plaintiff's affidavit of 29 August 2012). Counsel for the plaintiff took me, in particular, to that part of the report which appeared under the heading "Summary of opinion" in which Dr Lucire reported that in her opinion, the plaintiff: (a)was, in the 12 month period leading up to the commencement of the possession proceedings on 28 January 1988, suffering from an Adjustment Disorder with Mixed Anxiety and Depressed Mood, which may have been the direct result of a car accident in which he had been involved; (b)was, at the date of the making of the sequestration order, anxious and agitated, and sought treatment from a Dr Noonan; (c)had been consistently receiving psychiatric attention for depression and anxiety from a number of psychiatrists; (d)took medication which did not assist him up until 2000, at which time he ceased that medication and changed medical practitioners; (e)remained, at the time of examination in July 2012, agitated, "a bit" cognitively impaired, and suffering from difficulties with memory and concentration secondary to anxiety; and (f)had experienced misfortune in his life which had resulted in chronic unhappiness and depression. 23Although not formally part of the affidavit evidence, reference was also made by counsel for the defendant (in the context more fully set out below) to the fact that between 2005 and 2008 the plaintiff pursued proceedings against various entities in this court as well as the Local Court, the Federal Magistrates Court (as it was then known), the Federal Court of Australia and the High Court. In this context, reference was made to decisions in Murdaca v Accounts Control Management Services Pty Ltd [2006] NSWSC 68; Murdaca v Accounts Control Management Services Pty Ltd [2006] FMCA 1687; Murdaca v Accounts Control Management Services Pty Limited [2007] FCA 577; Murdaca v RAMS Mortgage Corporation Pty Ltd [2007] NSWSC 512; Murdaca v Accounts Control Management Services Pty Ltd [2007] FCA 964; and Murdaca v Accounts Control Management Services Pty Ltd [2008] HCA Trans 101. THE ISSUES FOR DETERMINATION ON THE MOTION 24The parties agreed that three issues arose for determination on the notice of motion. They are as follows: (a) did the plaintiff's right to bring proceedings against the defendant vest in his trustee as at the date of his bankruptcy? ("the first issue"); (b) if so, did that right "re-vest" in the plaintiff at the time of his discharge from bankruptcy by virtue of an assignment of it from the plaintiff's trustee? ("the second issue"); and (c) to the extent that the plaintiff seeks damages for personal injury, is that claim one which is unrelated to his property or estate, and therefore maintainable? ("the third issue"). THE PRINCIPLES APPLICABLE TO THE RELIEF SOUGHT 25The primary relief sought by the defendant in paragraph (1) of the notice of motion is that the proceedings be dismissed pursuant to r. 13.4 of the rules. Rule 13.4 is in the following terms: 13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under sub rule (1). 26Counsel for the defendant specifically relied on the provisions of r. 13.4(1)(c). He submitted that the proceedings brought by the plaintiff were an abuse of the process of the court because: (a)his right to sue the defendant was property which had vested in his trustee upon being made bankrupt and which had not "re-vested" in him; and (b)to the extent that his action was one for personal injury, it was one which was directly related to his property or estate, and therefore not maintainable. 27Every court has, as a necessary incident of its jurisdiction, the power to control its own proceedings and procedure, although what may amount to an abuse of process is insusceptible of a formulation comprising closed categories of circumstances (Batistatos v Roads and Traffic Authority of NSW [2006] HCA 27; (2006) 227 ALR 425 at [9]; 429). Proceedings which are futile, in the sense that they are untenable for some reason, are capable of constituting an abuse of process (Charles Forte Investments Ltd v Amanda [1964] Ch 240). 28In the course of argument counsel for the defendant sought to distinguish the present case from those in which relief might be sought pursuant to r. 13.4(1)(b) on the basis that no reasonable cause of action was disclosed. Counsel went to some lengths to point out that in the present case, the order dismissing the proceedings was not sought on the basis that there was some underlying defect in the merits of the plaintiff's action. Rather, he stressed that the order was sought on the basis that the proceedings constituted an abuse of process because there was a fatal and fundamental defect in the plaintiff's position. 29In my view, and in either case, the general principle that a plaintiff is prima facie entitled to have his case come to trial, and that an application to deprive him of that right will succeed only in the clearest of cases, remains applicable. I did not understand counsel for the plaintiff to take issue with the proposition that, irrespective of the particular basis upon which the court is asked to exercise its power pursuant to r 13.4, the suggested fatal defects in the plaintiff's case must be very clear before the court will intervene and dismiss the proceedings (as to which see General Steel Industries Inc v Commissioner for Railways New South Wales [1964] HCA 69; (1964) 112 CLR 125 at 129). 30In the alternative, relief was sought pursuant to r. 14.28 which is in the following terms: 14.28 Circumstances in which court may strike out pleadings (1)The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a)discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b)has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c)is otherwise an abuse of the process of the court. (2) The court may receive evidence on the hearing of an application for an order under sub rule (1). 31In contrast to r. 13.4, the court's power under r 14.28 is concerned with those cases where there is a defect in the pleadings. It is not directed to cases where the court comes to the conclusion that the plaintiff's case, as opposed to his pleading, is hopeless. When a pleading is defective, in that the pleading discloses no cause of action or the pleading tends to cause prejudice, embarrassment or delay, or the pleading is otherwise an abuse of process, the court has power under r 14.28 to strike out the whole, or part, of the pleading. 32For the purposes of r 14.28 a pleading will be regarded as embarrassing if it is unintelligible, ambiguous or so imprecise in its identification of material factual allegations as to deprive the opposing party of proper notice of the real substance of the claim or the defence (see Gunns v Marr [2005] VSC 251 at [15]). A pleading may also be embarrassing if it contains inconsistent, confusing or irrelevant allegations (see Shelton v National Roads and Motorists Association Limited (2004) 51 ACSR 278 at [18]). THE FIRST ISSUE The submissions of the parties 33Counsel for the defendant firstly pointed to the relevant sequence of events. He relied, in particular, upon the following: (a)the alleged acts and omissions which were said to give rise to the plaintiff's cause of action had occurred in the first half of 1998; (b) the plaintiff's proceedings had been commenced on 14 November 2011, more than 13 years later; (c)on 29 September 2006, that is within that intervening 13 year period, a sequestration order was made against the plaintiff; (d)on 27 October 2009, which was again within that intervening period, the plaintiff was discharged from bankruptcy. 34Counsel for the defendant further submitted that by virtue of the operation of s. 58 of the Bankruptcy Act 1966 ("the Act"), the plaintiff's property passed to, and vested in, his trustees on the making of the sequestration order, and thereupon became divisible amongst his creditors. He submitted that the effect of s. 58 of the Act was to create a "vesting scheme", by the operation of which the plaintiff's right to bring proceedings against the defendant vested in his trustees upon the making of the sequestration order. 35The principal submission advanced on behalf of the plaintiff was that notwithstanding s. 58 of the Act, and on a proper construction of s. 116(1)(b), no property comprised of the right to bring proceedings against the defendant had ever vested in the plaintiff's trustee at all. This, it was submitted, was because the plaintiff was under a mental disability at the relevant time (as outlined by Dr Lucire in the report to which I previously referred) and that, as a consequence, the plaintiff lacked the necessary capacity contemplated by s. 116(1)(b) to exercise any power in respect of such property. 36In response to the plaintiff's principal submission, counsel for the defendant submitted that the construction of s. 116 advanced by the plaintiff was not correct. He submitted that the use of the word "capacity" in s. 116(1)(b) should be construed as meaning "authority", rather than being read as a reference to a person's mental capacity. 37Counsel for the defendant also submitted that the construction advanced by the plaintiff was generally at odds with the nature of the scheme introduced by the Act which, he said, was designed to vest all of a bankrupt's property in his trustee notwithstanding that such a step might deprive the bankrupt of certain civil rights (as to which see the observations of Kirby P in Daemar v Industrial Commission of NSW (1988) 12 NSWLR 85 esp. at 50). 38In the alternative, counsel for the defendant submitted that even if the construction of s. 116(1)(b) of the Act which was advanced on behalf of the plaintiff were accepted as being correct, the evidence established that the plaintiff was not, at the relevant time, under any disability in any event. In this respect, Counsel relied upon the fact that between 2005 and 2008, the plaintiff had, in his own right, commenced various proceedings in this court, the Federal Magistrate's Court, and the Federal Court, and that in at least some of those proceedings the plaintiff had appeared in person (see [23] above). 39Counsel drew particular attention to a judgment of Young CJ in Eq in Murdaca v RAMS Mortgage Corp Ltd [2007] NSWSC 512 where his Honour (at [9]) described the plaintiff as a "self represented litigant appearing at the hearing ..... who appeared for himself and did so competently and courteously". Counsel submitted that in light of his Honour's description, and having regard to the fundamental fact that the plaintiff had commenced and conducted proceedings in his own right and without the appointment of a tutor, the evidence supported a conclusion that he was not, at the relevant time, under any relevant incapacity. Consideration and determination of the first issue 40There are a number of sections of the Act which are relevant to the determination of the first issue. 41The parties agreed that the plaintiff's right to bring proceedings against the defendant was "property" within the definition in s. 5 of the Act which is in the following terms: Property means real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property. 42Section 58(1) is in the following terms: 58 Vesting of property upon bankruptcy-general rule (1) Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being afteracquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) afteracquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee. 43Section 116(1) of the Act is in the following terms: Property divisible amongst creditors (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 or her discharge; and (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; and (c) property that is vested in the trustee of the bankrupt's estate by or under an order under section 139D or 139DA; and .... is property divisible amongst the creditors of the bankrupt. 44Section 132 is in the following terms: Vesting and transfer of property (1) Subject to this section, and to section 158, where a trustee is appointed by the creditors, the property of the bankrupt passes to and vests in the trustee so appointed on the day on which the appointment takes effect. (2) Subject to this section, the property of the bankrupt passes from trustee to trustee and vests in the trustee for the time being during his or her continuance in office or, if the Official Trustee becomes the trustee, in the Official Trustee, without any conveyance, assignment or transfer. (3) Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered, and enables the trustee to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not vest in the trustee at law until the requirements of that law have been complied with. 45Pivotal to the submission advanced by counsel for the plaintiff were the provisions of s. 116(1)(b) of the Act. Shortly put, counsel submitted that no property comprised of the plaintiff's right to bring proceedings against the defendant ever vested in the trustee at any time, and was therefore not property divisible amongst the plaintiff's creditors. This, it was submitted, was because he lacked the mental capacity to exercise power over his property. 46In my view, that submission must be rejected for a number of reasons. 47As I have previously noted, the parties agreed that the plaintiff's right to bring proceedings against the defendant formed part of the plaintiff's "property" having regard to the definition of that term contained in s. 5 of the Act. By virtue of the operation s. 58 of the Act, along with the operation of s. 132, that property vested in the plaintiff's trustee upon the making of the sequestration order against him. Section 58 lays down a general rule. It provides for a mechanism whereby, upon the making of a sequestration order, the bankrupt's property vests in his or her trustee. In the present case, that mechanism resulted in the plaintiff's right to bring proceedings against the defendant being vested in his two appointed trustees upon the making of the sequestration order. The provisions of s. 116 generally, and the provisions of s. 116(1)(b) in particular, are directed to a different issue, namely the divisibility of such property as was vested in the bankrupt as at the date of the bankruptcy. Even if it is assumed that s. 116(1)(b) has some bearing upon the present issue, the word "capacity" as it is used in that section refers, in my view, to capacity in the sense of "authority" or "right" to exercise a particular power over property, rather than mental capacity as was submitted on behalf of the plaintiff. I am fortified in that view by the decision in Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124. In that case, the High Court, in considering the question of whether a right to appeal in an action brought to enforce a liability of the bankrupt was "property" within the meaning of s. 5 of the Act, Brennan CJ, Gaudron J and McHugh J observed (at 133) "A chose in action may be the property of the person entitled to enforce it but a liability to satisfy a judgement enforcing a chose in action is not property of the person against whom the judgment is entered. A liability is not property of the person liable. Nor is a right to appeal against a money judgment property of the judgment debtor. Nor does such right to appeal answer the description of property divisible amongst creditors defined by s. 116(1)(b), namely, '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 own benefit'. The powers referred to are powers 'which are familiar to all conveyancers and are powers properly so called', as Farwell J pointed out in Re Rose; Trustee of the Property of ET Rose v Rose (1904) 2 Ch 348; (1905) 1 Ch. 94. In other words, the powers referred to are authorities to dispose of property or interests in property for the benefit of the donee of the power or of some other person. In this case, there is now property 'over or in respect of' which the bankrupt is or would have been capable of exercising a power. As a matter of ordinary language, a judgment debtor's right to appeal against the judgment is not property" (emphasis added) 48For these reasons, I find that the plaintiff's right to bring proceedings against the defendant was property which vested in his trustees at the time of the making of the sequestration order against him. THE SECOND ISSUE The submissions of the parties 49Counsel for the plaintiff submitted that even if a conclusion was reached that the plaintiff's right to bring proceedings against the defendant vested in his trustee upon the making of the sequestration order, such right "re-vested" in the plaintiff upon his discharge from bankruptcy by virtue of it having been assigned back to him by his trustee. In this regard, counsel relied upon correspondence from one of the trustees, Mr Porter, to the plaintiff, and in particular the letter of 23 December 2011 from Mr Porter to the plaintiff (the contents of which are set out in full at [16] above). He submitted that such correspondence constituted an assignment by the trustee, back to the plaintiff, of the right to bring proceedings against the defendant. Whilst conceding that the evidence did not support a conclusion that there had been an assignment at law, counsel for the plaintiff submitted that the evidence supported a conclusion that there had been an assignment in equity. 50Counsel for the defendant submitted that as a matter of fundamental principle, the discharge of a bankrupt does not, of itself, have the effect of re-vesting, in the bankrupt, the property which was vested in the trustee upon the making of the sequestration order. He further submitted that properly construed, the correspondence from Mr Porter did not constitute an assignment of the right to bring proceedings against the defendant back to the plaintiff and that, in particular, the evidence did not support the conclusion that there had been an assignment in equity. Consideration and determination of the second issue 51Section 152 of the Act is in the following terms: Discharged bankrupt to give assistance A discharged bankrupt must, even though discharged, give such assistance as the trustee reasonably requires in the realization and distribution of such of his or her property as is vested in the trustee. Penalty: Imprisonment for 6 months. 52Section 153(1) of the Act is in the following terms: Effect of discharge (1) Subject to this section, where a bankrupt is discharged from a bankruptcy, the discharge operates to release him or her from all debts (including secured debts) provable in the bankruptcy, whether or not, in the case of a secured debt, the secured creditor has surrendered his or her security for the benefit of creditors generally. 53The operation and effect of these provisions were considered by Needham J in Pegler v Dale (1975) 1 NSWLR 265 at 267: "The only way that I can see the property of the bankrupt is vested in the trustee is by virtue of the sequestration order. If property so vested in the trustee continues to be vested in the trustee after discharge, as s. 152(1) indicates, then the operation of s. 153 in discharging the bankrupt from debts cannot have the effect of re-vesting, in the bankrupt, the property which was, under the sequestration order, vested in the trustee." 54The proposition that the property of a bankrupt does not re-vest in the bankrupt upon discharge from bankruptcy has been subsequently confirmed on a number of occasions. In Piwinski v Corporate Trustees of the Diocese of Armidale (1975) 1 NSWLR 265; (1975) 6 ALR 62), a builder had sued a client for damages for breach of a building contract and subsequent to the commencement of the proceedings, the builder's estate was sequestrated. A deed of settlement was subsequently executed between the builder and the official receiver, whereby the builder's claim was withdrawn. Following his discharge from bankruptcy, the builder again commenced proceedings on the same cause of action. In ordering that the proceedings be dismissed, Waddell J said (at 279): "The next question is whether such property remains vested in the Official Receiver notwithstanding the subsequent discharge of the plaintiff from bankruptcy. I think that, clearly, it does. By statute the property was vested in the official receiver under the 1924 Act. Pursuant to the transitional provisions under the 1966 Act it became vested in the official receiver under that Act. There is nothing 1966 Act which divests the Official Receiver of that cause of action, or the property to which it relates. In fact, one its provisions, s, 152(1), requires the bankrupt to assist the Official Receiver, even though discharged, in recovery of the property vested in him. Just looking at the statute then, it is clear, I think, that the property to which the proceeding relates remains vested in the Official Receiver under the 1966 Act. In reaching this conclusion I would respectfully adopt the reasoning which lead Needham J to reach the same conclusion in Pegler v Dale. It follows that the plaintiff is not competent to bring this proceeding to recover property and damages, the right to which remain vested in the Official Receiver." 55Similarly, in Daemar v Industrial Commission of New South Wales and Anor [No 2] (1990) 22 NSWLR 178, Kirby P said at p. 185 (in reference to the judgment of Needham J in Pegler v Dale): "(Section 152 of the Act), as Needham J pointed out, assumes that property vested in a trustee at the time of sequestration remains vested in that trustee, even after the discharge of the bankrupt. There is nothing in the section that specifically re-vests in the discharge bankrupt. The property which was, by the sequestration order, vested in the trustee. That property included choses in action. Not only is Needham J's construction attentive of the language of s. 152. It is appropriate to the scheme of the Bankruptcy Act. Under that Act, it is the function of the trustee to gather in for the benefit of the creditors of the property of the bankrupt at the time of sequestration. Save for the exceptions provided by the Act, such property is to be then available for distribution to the creditors. The property includes choses in action. It thus includes the 'actions' which a bankrupt may have commenced at the time of the sequestration order. The act exempts certain personal actions. But, for the reasons which were given in the original stay proceedings, the claimants action against the Industrial Commission and Mr Sheath is not in that class". 56In my view, in light of these authorities, the statement of principle relied upon by counsel for the defendant was clearly correct. Property vested in a trustee at the time of the making of a sequestration order does not re-vest in the bankrupt upon discharge from bankruptcy. Accepting this to be the case, the question is whether or not the property in the present case, is whether the plaintiff's right to bring proceedings against the defendant was assigned back to him by the trustee by virtue of the correspondence which passed between them. 57In the correspondence of 23 December 2011, the trustee informed the plaintiff that he had no interest in the proceedings and ought not be added as a party. He also told the plaintiff, in specific terms, that there was "no claim vesting (in him) to assign to (the plaintiff)". The entirety of that correspondence runs directly contrary to the proposition that there was an assignment to the plaintiff. Subsequent events, and in particular the trustee's refusal to execute the Deed sent to him on 16 July 2012 (set out at [16] and [17] above) only serve to confirm that position. 58However, and more specifically, the correspondence which passed between the plaintiff and Mr Porter is not, in my view, sufficient to establish the requirements necessary for an equitable assignment. In Norman v Federal Commissioner of Taxation [1963] HCA 21; (1963) 109 CLR 9 Windeyer J observed (at 28): " .... the general rule of equity is that an effective assignment occurs only if the donor does all that, according to the nature of the property, he must do to transfer the property to the donee. But the weight of authority is, I think in favour of the view that in equity there is a valid give of property transferable at law if the donor, intending to make, then and there, a complete disposition and transfer to the donee, does all that on his part is necessary to give effect to his intention and arms the done with the means of completing the gift according to the requirements of the law ..." 59In my view, the terms of the correspondence from Mr Porter to the plaintiff are generally at odds with the proposition that Mr Porter had the intention to which Windeyer J referred. The correspondence is similarly at odds with the proposition that Mr Porter did everything required in order to put such intention into effect. 60For these reasons, I conclude that there was no assignment of any property to the plaintiff upon his discharge from bankruptcy. THE THIRD ISSUE The submissions of the parties 61It is common ground between the parties that at least part of the plaintiff's claim against the defendant is a claim for damages for personal injury or wrong done to him. Having regard to the provisions of s. 60(4) of the Act, it is prima facie open to a bankrupt to continue such an action which had been commenced by him before he or she became bankrupt. In the present case of course, the proceedings were commenced well after the plaintiff became bankrupt and, indeed, some considerable time after his discharge. Counsel for the plaintiff submitted that in these circumstances, even I was to find against the plaintiff in relation to the first and second issues, the plaintiff should nevertheless be permitted to proceed with that part of his claim in which he seeks damages for personal injury. 62Counsel for the defendant submitted (and I understood counsel for the plaintiff to accept) that in terms of actions by a bankrupt for damages for personal injury, a distinction is drawn between independent causes of action for personal injury on the one hand, and actions for personal injury which are consequent upon, or related to, a bankrupt's property rights on the other. In these circumstances, counsel submitted that even though s. 116(2)(g)(i) of the Bankruptcy Act preserves the right of a bankrupt to recover damages for personal injury, it does not extend to a personal injury claim which is directly related to the bankrupt's property or estate. He submitted that the plaintiff's personal injury claim fell into such a category. Counsel for the plaintiff took issue with this latter proposition, and contended that on a proper analysis, the plaintiff's claim for damages for personal injury was one which stood apart from, and independently of, any property right. Consideration and determination of the third issue 63I have already noted that the provisions of s. 116 of the Act which deal with the issue of property of a bankrupt which is divisible amongst that bankrupt's creditors. Section 116(2) specifically excludes certain property from the operation of s. 116(1), such that it is not divisible amongst a bankrupt's creditors. One such exclusion is that property contained in s. 116(2)(g)(i): (g) any right of the bankrupt to recover damages or compensation: (i) for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; or (ii) in respect of the death of the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person. 64Also relevant to a consideration of this issue are the provisions of s. 60(4) of the Act which are in the following terms: (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 de facto partner or a member of his or her family; or (b) the death of his or her spouse or de facto partner or of a member of his or her family. 65In my view, the statement of principle articulated by counsel for the defendant (referred to in [62] above) was clearly correct. In Murdaca v RAMS Mortgage Corporation Limited [2007] NSWSC 512, Young J observed (at [12]): "..... there have been a series of cases from very high tribunals all pointing in the one direction. These decide that, when one is considering subs. 4(a), one must distinguish between one the one hand, cases where there is damage to the person or mind of the bankrupt which is connected with his property, and those which are consequential to property claims, and personal injury claims that arise completely independently on the other hand". 66His Honour went onto cite a number of authorities including Cox v Journeaux and Ors [No 2] [1935] HCA 48; (1935) 52 CLR 713; Daemar v Industrial Commission of New South Wales and Ors [No 1] (1988) 12 NSWLR 45 and Mannigel v Hewlett Phelps [1991] NSWCA 186. 67In Mannigel (supra) Handley JA (by reference to the decision in Cox v Journeaux and Daemar v Industrial Commission of NSW) stated the principle in this way (at 2): "The test appears to be whether the damages, or part of them, are estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character, without reference to his rights of property". 68In light of these authorities, reference must be made to the statement of claim filed by the plaintiff in order to determine whether the plaintiff's action for damages for personal injury can meet the relevant test. 69Paragraphs (2) and (4) of the statement of claim are the following terms: "(2) The defendant represented the plaintiff in a matter in the Supreme Court of New South Wales, Sydney Registry, File No. 10204/1988. The matter involved a claim for possession of the plaintiff's real property at 142 Heathcote Road, Moorebank New South Wales. (4)The defendant owes the plaintiff compensation for causing him to suffer mental and physical injuries and financial loss resulting from the defendant's negligence in (2) above". 70Paragraph (16) pleads, in part, as follows: The defendant was negligent by not advising the plaintiff of his legal rights as in: (a)that he could have made an application to the court that upon subdivision that he was in a stronger commercial position and able to sell so much of the strata titles to have the mortgage discharged or refinanced and to retain the development lot; (b)to have the application or notice of motion to be heard by a judge of the court; (c)to inform the court that at no time was he consensual to the court orders made by consent on 18 May 1998; (d)to submit to the court that because of the property being subdivided, that the mortgagee had no cause of action if it ever had at all and that it should release to the plaintiff $30,000 it had withheld from him; and (e)to ask leave of the court to continue the cross claim against the mortgagee. 71Under the heading "Personal injury to the plaintiff" paragraphs (19), (20) and (21) of the statement of claim are in the following terms: "19. The negligence of the defendant in 1998 caused impairment of the plaintiff's mental condition and caused further injury in that the plaintiff had to suffer humiliation and loss of self-respect in seeing his project being completed by someone else in 1999 (the plaintiff lived on the site in town - house number 1). Consequentially (sic) the plaintiff needed several years of regular psychiatric treatment. The injuries to his mental and physical health contributed towards his bankruptcy in September of 2006 and the sale (by the trustee in bankruptcy) of all of his assets in 2009. 20. The building of 6 - townhouses on Lot (7) - stage (2) - was to be the profitable stage of the plaintiff's project which he started in 1990; he was involved in the design, the development of the project and the building of 6 town - house of stage (1) in an incremental process of two houses at a time; this activity was a therapeutic benefit to him. The professional negligence of the defendant caused the loss of stage (2) of the plaintiff's project which altered (and augmented with major depression) his mental condition causing his (sic) several years of a withdrawn and sedentary existence resulting in damage to his physical health. The plaintiff was diagnosed in 1988 with a schizoaffective disorder by his treating psychiatrist. Between 1988 and 1998 his illness was severe and disabling in irregular periods. Post the court proceedings of 1998 to the present time the disabling aspects of his injuries - illness have been constant. 21. The plaintiff claims compensatory damages for personal injury and relies on the discretion of the court for an amount that the court may consider appropriate". 72In light of the pleadings, the claim for damages brought by the plaintiff is one which is consequential upon the alleged negligence of the defendant in the possession proceedings. The possession proceedings arose from the granting of a mortgage by the plaintiff to secure finance for a property development. In those circumstances, the plaintiff's claim for damages for personal injury could not, in my view, be categorised as a claim "without reference to his rights of property" (see Mannigel (supra) per Handley JA at 2). That being the case, the action is not maintainable. 73Counsel for the plaintiff, whilst conceding that property issues were "associated with the claim to a point" submitted that the determination of this question involved something more than mere reference to the manner in which the statement of claim had been pleaded. He submitted that the personal injury complained of by the plaintiff could "potentially be tied down to a number of factual alternatives". By way of example, counsel referred me to paragraph (5) of the statement of claim which pleads (inter alia) that the plaintiff is the defendant's uncle. He submitted that it was part of the plaintiff's case that the relevant breaches of the defendant were not only breaches by a solicitor, "but by a solicitor who was a relative" and that this was "so disappointing that the plaintiff suffered a psychiatric injury". The difficulty with that submission is that no such claim is pleaded. Even if it were, it would not, in my view, change the fundamental character of the plaintiff's cause of action as set out in [72] above. 74For these reasons, I have concluded that the plaintiff's action, to the extent that it claims damages for personal injury, is not maintainable. ORDERS 75For the foregoing reasons I make the following orders: (i) the proceedings are dismissed; (ii) the plaintiff is to pay the defendant's costs. ********** Amendments 29 April 2013 - Correction - "the plaintiff is to pay the defendant's costs" replaces the "defendant is to pay the plaintiff's costs" . Amended paragraphs: 75(ii) 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. Decision last updated: 29 April 2013