Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Tadrosse v Ndaira [2015] NSWCATAP 84 Hearing dates: 17 March 2015, 21 April 2015 Date of orders: 08 May 2015 Decision date: 08 May 2015 Jurisdiction: Appeal Panel Before: P Durack, SC – Senior Member R Titterton – Senior Member Decision: (1)The appeal be dismissed. (2)The orders of the Tribunal below made on 4 June 2014 be set aside. Catchwords: APPEAL – Civil and Administrative Tribunal (NSW) – appellant bankrupt at all material times – impact on appeal and on decision below Legislation Cited: Bankruptcy Act 1966 Civil and Administrative Tribunal Regulation 2013 Civil and Administrative Tribunal Act 2013 (NSW) Cases Cited: Cummings v Claremont Petroleum NL (1996) 185 CLR 124 Samootin v Shea [2010] NSWCA 371 at [64] Category: Principal judgment Parties: George Tadrosse (Appellant) Eddie Ndaira (Respondent) Representation: Mitry Lawyers for the Appellant No representation for the Respondent File Number(s): AP 14/53053 Publication restriction: None Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Date of Decision: 4 June 2014 and 28 October 2014 Before: D Sheehan – Member, 4 June 2014 decisionD Charles – Member, 28 October 2014 decision File Number(s): HB 14/12470 REASONS FOR DECISION Introduction 1. In October 2012, the Appellant (Mr Tadrosse) constructed a concrete driveway at the Respondent's (Mr Ndaira) residence in Blacktown. 2. In February 2014, Mr Ndaira commenced proceedings in the Tribunal against Mr Tadrosse claiming that the concrete work was badly cracked and needed to be replaced. 3. On 4 June 2014 the Tribunal below ordered Mr Tadrosse to pay Mr Ndaira the sum of $26,400 being the reasonable costs of replacing the defective concreting. Those orders were made in the absence of Mr Tadrosse. The reasons for decision did not refer to Mr Tadrosse's absence and did not identify the reasons why the Tribunal decided to proceed in his absence. The Tribunal erred in failing to address those aspects in the reasons: Trenholme v Paltram [2015] NSWCATAP 36. 4. On 19 September 2014, Mr Tadrosse applied to set aside the Tribunal decision of 4 June 2014 under cl 9 of the Civil and Administrative Tribunal Regulation 2013 (the Regulation). In his application he stated that not only had he not been given notice of the hearing he was also a bankrupt and that he would have brought this to the Tribunal's attention had he been given notice of the hearing. 5. On 28 October 2014, the application to set aside the decision was refused on the ground that the Tribunal was not satisfied that Mr Tadrosse's case had not adequately been put to the Tribunal. The Tribunal noted that Mr Tadrosse had not, as directed, provided evidence of his bankruptcy and it was not clear whether he was bankrupt at the time of the Tribunal's decision of 4 June 2014. 6. Mr Tadrosse has now lodged an appeal against the Tribunal's decision of 4 June 2014 and the Tribunal's decision to refuse to set aside that decision. 7. In our view, as a consequence of Mr Tadrosse's bankruptcy the appeal must be dismissed. We are also of the view that it is appropriate to set aside the orders of the Tribunal below made on 4 June 2014. Mr Tadrosse's bankruptcy 1. A bankruptcy report obtained by the Appeal Panel shows that a sequestration order in relation to Mr Tadrosse was made on 8 May 2012 and that he remains an undischarged bankrupt. 2. Throughout all of the events concerning this matter, including the carrying out of the construction work, the proceedings in the Tribunal below and the appeal, Mr Tadrosse was, in fact, a bankrupt. Effect of the bankruptcy on the Appeal 1. No leave of the court was obtained by Mr Ndaira to commence proceedings in the Tribunal against Mr Tadrosse. Accordingly, Mr Ndaira was not competent to bring those proceedings: s 58(3)(b) of the Bankruptcy Act 1966. Those proceedings were incompetent: Samootin v Shea [2010] NSWCA 371 at [64]. 2. The Tribunal's decision of 4 June 2014 was made in ignorance of this fundamental defect in the proceedings. 3. We consider what should be done about this unsatisfactory state of affairs further below. First, we address the impact of Mr Tadrosse's bankruptcy on the appeal. 4. The appeal must be dismissed because Mr Tadrosse has no standing to bring the appeal: Cummings v Claremont Petroleum NL (1996) 185 CLR 124. The effect of the bankruptcy is that a bankrupt has: "No financial interest which would confer locus standi to appeal in his own name against the judgment. That is because it is fundamental to the law of bankruptcy that the bankrupt is divested of both his interest in his property and liability for his provable debts." Per Brennan CJ and Gaudron, McHugh JJ at page138.1. 1. In so finding, the plurality in the High Court did not agree with the majority in the Full Court of the Federal Court who had taken the view that the appeal right to challenge the appellant's liability was property of the bankrupt that vested in the trustee in bankruptcy with the consequence that the bankrupt had no authority to bring the appeal. 2. The present situation is to be distinguished from that which applies when proceedings are brought by the bankrupt before the bankruptcy. That situation is specifically addressed in the Bankruptcy Act in s 60(2). Except for certain limited actions, such proceedings are stayed until the trustee elects either to prosecute or discontinue the proceedings or the proceedings are deemed to be abandoned. What to do about the decision at first instance 1. The decision of 4 June 2014 was fundamentally flawed. Presumably, it would never have been made had the bankruptcy been known to the Tribunal. In our view, it should not be left to stand. Although not directly applicable, it is of some assistance that it is an abuse of process for a person who lacks the legal right to do so to bring proceedings in a court and that a court on its own motion should dismiss such proceedings: Samootin at [65]. 2. In our view, there are two sources of power to set aside the decision of 4 June 2014 in the unusual circumstances of this case. First, in determining an appeal the Appeal Panel may make such orders "as it considers appropriate" in light of its decision on the appeal, including (but not limited to) an order that provides for the appeal to be dismissed: s 81 of the Civil and Administrative Tribunal Act 2013 (NSW) (the Act). 3. In light of the width of that power, and that it follows from the bankruptcy that both the appeal must be dismissed and that the orders of 4 June 2014 would never have been made if the Tribunal had been aware of the bankruptcy, we are of the view that in determining the appeal we should also order that the orders of 4 June 2014 be set aside. 4. Another source of power available to the Tribunal is to set aside the orders of 4 June 2014 on its own motion under cl 9(2) of the Regulation in view of the circumstances referred to in cl 9(1)(b). We are satisfied that both the circumstances referred to in cl 9(1)(b) exist in this case. At the hearing on 21 April 2015 both parties were afforded an opportunity to make submissions on the making of the order in question as required by cl 9(4). We have taken their submissions into account. 5. If, contrary to our view, the power in s 81 of the Act does not permit us to set aside the orders of 4 June 2014 then we would have set aside those orders at our motion pursuant to cl 9 of the Regulation. Orders 1. For the above reasons, the Appeal Panel makes the following orders: 1. The appeal be dismissed. 2. The orders of the Tribunal below made on 4 June 2014 be set aside. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. 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