FEDERAL COURT OF AUSTRALIA

Rana v Musolino [2009] FCA 1050

BANKRUPTCY – whether show cause proceedings in the High Court vested in bankrupt applicant's trustee – applicant challenging trustee's decision to issue notice of discontinuance in High Court – whether decision challenged in show cause proceeding related in part to a claim for damages for “personal injury or wrong” – personal claim integrally interconnected with substantive non-personal claims – unnecessary to consider apportionment

PRACTICE AND PROCEDURE – summary dismissal – Federal Court of Australia Act 1976 (Cth) s 31A – Federal Court Rules O 20 r 5 – application having no reasonable prospects of success – High Court seized of the matter

Administrative Decisions (Judicial Review) Act 1976 (Cth)

Bankruptcy Act 1966 (Cth) ss 58(1), 60(2), 60(3), 60(4)(a), 60(5), 116(2)(g), 134(e), 134(j), 134(o), 178

Federal Court of Australia Act 1976 s 31A

Trade Practices Act 1974 (Cth) s 52

Federal Court Rules O 20 r 5    

Tait v Harris [2003] FCA 446 cited

Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 applied

Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 592 cited

Rana v University of Adelaide [No 2] [2008] FCA 494 cited

Walton v Gardiner (1993) 177 CLR 378 cited

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 applied

Daemar v Industrial Commission of New South Wales [No 2] (1990) 22 NSWLR 178 considered

Madden v Madden [1995] FCA 297 cited

Fitzpatrick v Keelty [2008] FCA 35cited

Cox v Journeux [No 2] (1935) 52 CLR 713 cited

Faulkner v Bluett (1981) 52 FLR 115 cited

Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 cited

3 The Laws of Australia, “Bankruptcy” at [3.8.940]

RANJIT SHAMSHER JUNG BAHDUR RANA v ROSEMARIE MUSOLINO, OFFICIAL TRUSTEE IN BANKRUPTCY and AUSTRALIAN GOVERNMENT SOLICITOR

No SAD 206 of 2008

FINN J

18 SEPTEMBER 2009

ADELAIDE

THE COURT ORDERS THAT:

1.         The application be dismissed against each respondent.

2.         The applicant pay the costs of each respondent. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                          Ranjit Rana became bankrupt on 13 August 2008.  Prior to that date he had a multiplicity of proceedings in this Court.  His present amended application, in form at least, relates to decisions allegedly taken by the three respondents in relation to some number of the proceedings in which he was unsuccessful.  It has been brought, nominally as will be seen, under the Administrative Decisions (Judicial Review) Act 1976 (Cth).  Its scope and flavour are betrayed in the first three paragraphs of the amended application:

Application to review the decisions of the 1^st, 2^nd and 3^rd respondents not to allow the applicant to pursue his constitutional writ or apply for writ to show cause, in matters decided in the Federal Court of Australia in matters numbers SAD 47, 48, 83 and 124, which so far has High Court numbers A 20 and 32 of 2008, and others are being not accepted by the decision of the 1^st respondent in a letter sent to the applicant on 4/12/2008.

Application to review the conduct of the 3^rd respondent under which it keeps on giving erroneous advice to the 1^st to the 2^nd respondents that the applicant is a bankrupt, and that he and others in Australian Government Solicitors have been sued with the intent as a vexatious litigant, and such actions has no prospect of success, even they may be couched in language of personal injuries and wrongs to the appellant.

Application to review conduct in which all of the respondents proposes to engage by which the applicant cannot issue writs and/or seek special leave due to effect of the s 60(2) and (3) of the Bankruptcy Act 1966 (Cth).  All of the respondents claim that the advice of the 3^rd respondent is clear that the applicant has no standing in all actions now in High Court and/or as proposed there to fall within s 60(4) of the Bankruptcy Act 1966.

2                          The proceeding itself is now the subject of a motion for summary judgment by the Official Trustee under s 31A of the Federal Court of Australia Act 1976 or else for dismissal under O 20 r 5 of the Federal Court Rules.

3                          Insofar as it relates to the third respondent, the Australian Government Solicitor, the proceedings has been discontinued by the Official Trustee.  The action against the third respondent was in any event incompetent.

4                          The first respondent, a Deputy Registrar of the High Court of Australia, has agreed to abide by any order of the Court save as to costs.  As I understand Mr Rana’s application against the Registrar it is without foundation once its essence is appreciated.  The Official Trustee having filed a notice of discontinuance in an application in the High Court in A20 of 2008 for an order to show cause against a judge of this Court, the Registrar has taken no further steps in that matter.  Unless and until the Official Trustee’s decision to file that notice is declared invalid, the Registrar was entitled to act upon it.  In any event, any decisions taken by the Registrar in relation to the acceptance or otherwise of material for filing in the High Court, even where potentially amenable to review under the AD(JR) Act;  see Tait v Harris [2003] FCA 446;  are not ones in relation to which I should make any determination.  Such matters, which involve the conduct of the High Court’s own officers in the discharge of their duties, are, in my view, ones for that Court itself properly to determine.

5                          The real respondent in this matter is the Official Trustee and Mr Rana’s complaints are in relation to decisions allegedly taken by the Trustee in relation to proceedings which Mr Rana has prosecuted and lost in this Court (whether at first instance or on appeal).

6                          Because the application relates to decisions taken by the Trustee in that capacity, the application has been dealt with as well as if it were made under s 178 of the Bankruptcy Act 1966 (Cth).  The section provides:

178(1)  If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable.

178(2)  The application must be made not later than 60 days after the day on which the person became aware of the trustee’s act, omission or decision. 

I simply note that the application initiating this proceeding appears to have been filed within the time limited by s 178(2) in respect of what I consider to be operative decisions of the Trustee in this matter.

7                          I should make several additional comments by way of preface concerning this proceeding.  First, to the extent that Mr Rana seeks curial relief in respect of actions which have not yet occurred or decisions which have not been taken, I obviously will not entertain those matters.  It is not my function to provide what will in essence be advisory opinions or answers to what might well be hypothetical issues.  Secondly, the material that Mr Rana has put on in support of his application is in some degree impenetrable.  I have attempted to reduce his complaints to what I consider could constitute justiciable issues.

THE BANKRUPTCY ACT SETTING

8                          A sequestration order was made against Mr Rana on 13 August 2008 and the Official Trustee was appointed trustee of his bankrupt estate.  Some number of the Federal Court decisions referred to in his amended application were heard and disposed of prior to Mr Rana’s bankruptcy.  In relation to others, the appellate processes had not by then been exhausted.

9                          Insofar as presently relevant, s 58(1)(a) of the Bankruptcy Act provides that:

58(1)    Subject to this Act, where a debtor becomes a bankrupt:

            (a)        the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee … 

10                        Section 60(2) to (4) provide in turn:

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. 

60(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.

60(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 …

An “action” is defined in s 60(5) to mean any civil proceedings, “whether in law or in equity”.

11                        Finally, s 116 of the Act, insofar as presently relevant, states:

116(1)  Subject to this Act:

            (a)        all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy …

            (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

            …

            is property divisible amongst the creditors of the bankrupt. 

116(2)  Subsection (1) does not extend to the following property:

            …

            (g)        any right of the bankrupt to recover damages or compensation:

                       (i)         for personal injury or wrong done to the bankrupt, the spouse 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.

12                        These provisions have been subjected to considerable judicial exegesis.  It suffices for present purposes if I refer without further comment to observations of Kirby P in Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 at 50:

These provisions make it clear that the scheme and purpose of the Act is, upon the debtor’s becoming a bankrupt, to transfer property rights, including certainly the right to sue in respect of claims to property, from the bankrupt to his trustee.  This is so, notwithstanding that it involves personal inconvenience to the bankrupt:  see Faulkner v Bluett (1981) 52 FLR 115 at 119.  Indeed, it is so notwithstanding the fact that it deprives the bankrupt of important civil rights which he or she would otherwise normally enjoy.  It is of the essence of bankruptcy, as provided for by the Act, that property which belongs to the bankrupt, including choses in action (other than those which are specifically exempted) are vested upon bankruptcy in the bankrupt’s trustee.

THE VARIOUS PROCEEDINGS ALLEGEDLY AFFECTED BY THE TRUSTEE’S “DECISIONS”

13                        As I noted earlier, the Amended Application in this matter refers to a number of decisions of this Court – and anticipates others – in relation to which it is alleged, the Trustee has taken, or will take, decisions to block proceedings by Mr Rana for constitutional writs or writs to show cause.  The allegation is for the most part without foundation, although some of the decisions have been ones in which the Trustee has decided, favourably to Mr Rana, that the actions in question fell within the “personal injury or wrong” exception of s 60(4) of the Bankruptcy Act.

14                        For ease in exposition I will use the Court numbering of the various proceedings that are said to be presently relevant.  I will deal first with the Federal Court matters and then the two High Court proceedings.

(i)         SAD 48 of 2008

15                        This was an application for an extension of time to appeal from a decision of a judge of this Court made on 3 April 2008.  The application was refused by Mansfield J on 20 October 2008.  The Trustee was not a party to the proceeding.  It came to the view that s 60(4) of the Act applied to the action as it involved predominantly issues concerning a claim by Mr Rana for personal injuries compensation.  Mr Rana was advised of this view by letter dated 10 December 2008.  Mr Rana could not claim to be “a person aggrieved” by such a decision of the Trustee for AD(JR) Act purposes.  The evidence put on on behalf of the Trustee, which I accept, is that it made no decision, act or omission detrimental to Mr Rana in SAD 48 of 2008.

16                        I find Mr Rana has no reasonable ground for impugning the Trustee’s decision under the AD(JR) Act or s 178 of the Bankruptcy Act.

(ii)        SAD 83 of 2008

17                        On 17 June 2008 a judge of this Court dismissed an application of Mr Rana as vexatious.  An appeal from that decision to the Full Court of this Court was dismissed on 21 November 2008.  The Trustee was not a party to those proceedings and again took the view that the action was excepted by s 60(4) although it did not communicate this to Mr Rana.  No application for special leave was made.

18                        My conclusion in relation to this matter is the same as in relation to SAD 48 of 2008 and for the same reasons.  Mr Rana has no reasonable or available ground for impugning the Trustee’s decision under the AD(JR) Act or s 178 of the Bankruptcy Act. 

(iii)       SAD 124 of 2008

19                        This was an appeal by Mr Rana from the decision of the Federal Magistrate who made the sequestration order against him.  The Trustee wrote to the court on 29 August 2008 notifying its decision to elect to discontinue the appeal.  Nonetheless, the matter properly was heard:  Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 592 at [11];  and the appeal was dismissed on 20 October 2008.  An application was made to the High Court for special leave.  As will be seen below that application has been dismissed.

20                        There is no decision of the Trustee in relation to the appeal to the Federal Court that could now found proceedings under the AD(JR) Act or s 178 of the Bankruptcy Act.

(iv)       A 32 of 2008

21                        This was the application for special leave to appeal against the decision in SAD 124 of 2008.  It was dismissed on 29 April 2009.  The Official Trustee does not appear, on the evidence before me, to have made any decision after the decision in SAD 124 of 2008 which could now be the subject of review in this matter.

(v)        A 20 of 2008

22                        On 25 August 2008 Mr Rana filed an application in the High Court for an order to show cause seeking relief by way mandamus and prohibition against a judge of this Court and certiorari to quash his decision of 17 June 2008 in SAD 47 of 2008.  On 28 November 2008 the Trustee executed a notice of discontinuance in relation to this application.  An amended version of it was filed on 23 December 2008.  The Trustee was of the view that an application for relief under s 75(v) of the Constitution vested in it pursuant to s 58 of the Bankruptcy Act as it did not comprise such an action for personal injury or wrong done to Mr Rana as was contemplated by s 116(2)(g) of the Act.  The evidence is that at no time did Mr Rana seek the Trustee’s consent to institute or maintain the action which was commenced after he had become a bankrupt.

23                        The substantive proceeding (SAD 12 of 2008) which gave rise to the decision in SAD 47 of 2008 to put the matter shortly, related to the preparation and communication of a psychiatric report in circumstances which allegedly gave rise to breaches of contract, breaches of confidence, negligence, defamation and contravention of s 52 of the Trade Practices Act 1974 (Cth) by one or other of the five respondents.  They were the University of Adelaide, the Repatriation Commission, the University of South Australia, the Australian Government Solicitor and the Chief of Army. 

24                        Justice Lander gave summary judgment for all five respondents under s 31A of the Federal Court of Australia Act on 17 March (1^st, 2^nd, 4^th and 5^th respondents) and (3^rd respondent) 7 April 2008.

25                        In the decision refusing the application for an extension of time in which to appeal against the above orders, Lander J indicated that judgment had been entered against Mr Rana under s 31A, not because of some failure in the pleading to identify a cause of action:

Judgment was entered against him [on 17 March] because, manifestly, in the manner in which the proceeding was presented, he had no claim against any of those four respondents.  He could not have, in my opinion, amended his statement of claim so as to cure those defects:  Rana v University of Adelaide [2008] FCA 940 at [14].

See also Rana v University of Adelaide [No 2] [2008] FCA 494 at [7] in relation to the 3^rd respondent where the claim dismissed was based on an email found to be not authentic. 

26                        I would interpolate that, having regard to the complaints made by Mr Rana against the various respondents, the proceeding before Lander J was, manifestly, an abuse of process:  it was “foredoomed to fail”:  Walton v Gardiner (1993) 177 CLR 378 at 393. 

27                        The preliminary point to be noted about A 20 of 2008 is that the action was commenced after Mr Rana’s bankruptcy.  Importantly it thus falls outside of the provisions of s 60(2) and (4) of the Bankruptcy Act.  This requires emphasis.  In Daemar a proceedings by way of summons claiming orders in the nature of prerogative relief (together with damages and declaratory relief) was held by the Court of Appeal of New South Wales to be an “action” for the purposes of s 60(2) of the Bankruptcy Act.  It was, in the circumstances, further held to be an action in which the plaintiff sought relief affecting his property.  It was not one in respect of any personal injury or wrong done to the bankrupt, Mr Daemar, for the purposes of the s 60(4) exemption from the s 60(2) stay.

28                        I am for present purposes obliged to accept the Court’s ruling in relation to its characterisation of the proceedings in that case as “an action”:  Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [135].

29                        The Bankruptcy Act does not make express provision for actions instituted by a bankrupt after his or her bankruptcy in respect of a cause of action which either predates or post-dates the bankruptcy.  The effect of the bankruptcy on that cause of action is said to be governed by s 58 and s 116 of the Act, these being the provisions relating to the vesting of the bankrupt’s property in the trustee in bankruptcy and to the property available for distribution among the creditors:  see 3 The Laws of Australia, “Bankruptcy” at [3.8.940].  If such be the case, the issue which arises is not, as in Daemar,with the question whether Mr Rana’s show cause proceedings is an “action”.  Rather, it is with whether it is “property” passing to the Trustee under s 58(1) and, if so, whether it is divisible amongst his creditors under s 116(1) or exempted therefrom by s 116(2)(g) (ie is it a “right … to recover damages or compensation … for personal injury or wrong done to [him]”).

30                        In Daemar Kirby P acknowledged the possibility of “a serious disharmony” between s 60(2) and s 58(1) and their respective operations upon claims brought, respectively, before and after bankruptcy supervened:  at 53 and 55.  In the case there before the Court, the claim (as noted) was instituted before the bankruptcy and thus fell clearly within s 60(2).  His Honour went on to say (at 55):

If the section is clear, as I believe it to be, the fact that it may sometimes provide a wider provision for a stay on proceedings commenced before bankruptcy than would effectively be secured by proceedings commenced after bankruptcy does not avail the claimant.  Especially because the Parliament has specifically adumbrated the exceptions to the operation of the statutory stay, in the terms of s 60(4), this indicates that it attended to the way in which prior civil action should go forward at the option only of the trustee, or be stayed by the statute. 

31                        The scheme of Part IV, Division 4 of the Bankruptcy Act (which contains s 58(1) and s 60(2) and (4)) would appear to proceed upon the premise that, subject to s 60(4), all “actions” encompassed by s 60(2) have been vested in the trustee by s 58(1) such that in the administration of the bankrupt’s estate, he or she can make the election envisaged by s 60.  Such vesting necessarily presupposes that all such actions were the bankrupt’s property. 

32                        In Daemar v Industrial Commission of New South Wales [No 2] (1990) 22 NSWLR 178, the New South Wales Court of Appeal revisited its earlier orders.  Mr Daemar had by now been discharged from bankruptcy and sought the vacation or variation of the stay which the Court had held was in place by force of s 60(2).

33                        The orders that had been made against Mr Daemar in earlier litigation and which were the subject of the prerogative relief sought, were ones which in part affected the rights of a third party.  A pecuniary award had been made in that party’s favour and Mr Daemar was seeking to impugn that award in his action for prerogative relief.  In approaching the matter, the Court first addressed the question of the status of an action vested in the trustee after the discharge of a bankrupt.  This brought into focus the position of the third party.  President Kirby (at 185) accepted the proposition that property vested in a trustee at the time of sequestration remains vested in that trustee, even after the discharge of the bankrupt.  His Honour then observed (ibid):

Therefore, the “action” which the claimant had to challenge the orders of the Industrial Commission so far, at least, as it relates to the claim for relief from the burden of those orders requiring him to pay an amount to the second opponent, remains vested in the trustee:  see also Selig v Lion [1891] 1 QB 513.  The trustee declines to bring proceedings, as trustee, although by the authority of Bennett v Gamgee, Re Summerhayes and Kwok he might have done so during the bankruptcy.  By the authority of Pegler v Dale he still remains vested with the chose in action.

(Emphasis added.)

34                        The reason for the limitation I have emphasised became more apparent in the following passages.  Mr Daemar had, in Daemar [No 2], sought to limit the relief claimed to the prerogative orders only.  This in turn became the focus of Kirby P’s reasons (at 185-186):

That leaves only the question of whether, as later narrowed to a claim for prerogative relief only, the claimant should be permitted to pursue his challenge in the Court to the alleged excess of jurisdiction and other legal errors on the part of the Industrial Commission.  It will be remembered that the claimant has sought to do this by proposing that the Court confine his relief to that prerogative in nature and even to the point of removing the second and third opponents from the record so that no relief would be sought against them.

The earlier decision of the Court did not determine that the claimant was forever barred from bringing proceedings for prerogative relief against the Industrial Commission.  It could scarcely have done so.  As was there pointed out, such proceedings may be commenced by any person.  They need not be brought before the Court by the person(s) most directly concerned, although a lack of connection will be a consideration taken into account in the provision of relief:  R v Justices of Surrey (1870) LR 5 QB 466;  Farquharson v Morgan [1894] 1 QB 552 at 556:  see, however, M Aronson and N Franklin, Review of Administrative Action (1987) Law Book Co at 441f and cases there cited.  The basic function of the court, in affording relief prerogative in nature, is not to provide a private litigant with a personal benefit (although that may be an indirect consequence of the order) but to uphold the law and to require subordinate office-holders to remain within the law and to act fairly in their observance of their lawful functions:  see R v Electricity Commissioners;  Ex parte London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 161 at 205.

Because the strictly prerogative relief which the claimant seeks is not wholly personal to him, but inheres in the legal system itself, it is not such as to belong to the trustee as a private chose in action even after the claimant’s discharge from bankruptcy. 

This conclusion can be tested in the following way.  There is no time limit for the commencement of proceedings for relief prerogative in nature.  Delay will be a consideration, taken into account by the Court, when determining whether to provide the relief.  That is why it is conventionally described as discretionary in character.  But, unlike an appeal, there is no fixed time for the commencement of such proceedings.  The claimant, who is under no relevant disability, being now discharged from bankruptcy, could therefore commence proceedings forthwith against the Industrial Commission seeking relief prerogative in nature against it.  He could do so by fresh process:  cf Want v Moss and Wife (1890) 6 WN(NSW) 102 at 103.

(Emphasis added.)

35                        The Court, in the end, refused to permit the proceedings to go forward even if so confined because it would lack utility.  This was because it would still affect impermissibly the third party’s award against Mr Daemar.

36                        It is, with respect, difficult to extract a simple explanation from the reasoning of the Daemar cases as to the force and effect of the Bankruptcy Act on an “action” for relief in the nature of prerogative relief.  If, as I have suggested above, s 60(2) is premised upon the action in question being the bankrupt’s property and thus having vested in the trustee, then, for the reasons given by Kirby P in Daemar [No 2], I would with respect have some difficulty in characterising an “action” that was simply for relief in the nature of a constitutional writ, as being the personal property of a bankrupt:  and cf the definition of “property” in s 5(1) of the Act.  My difficulty is compounded by Kirby P’s description of a claim for prerogative relief as not belonging to the trustee “as a private chose in action even after the claimant’s discharge from bankruptcy”.  If this suggests it changes its proprietary character on discharge it is difficult to see why this should be so. 

37                        Perhaps the better explanation of the two decisions is that (i) s 60(2) encompasses all of the bankrupt’s actions (for prerogative relief or otherwise) save for those exempted by s 60(4), but that the bankrupt has the clear statutory right under s 178(1) to challenge the trustee’s election not to prosecute or to discontinue such an action;  and (ii) after the bankrupt is discharged, he or she is entitled to initiate new proceedings for prerogative relief but that the fate of those proceedings may be influenced by its affects upon the continuing administration of the bankrupt’s estate and, in particular, by whether the prerogative relief sought can properly be characterised as being, in substance, in respect of the property of the bankrupt.

38                        The present, as I have noted, is not a s 60 case, and neither is Mr Rana an undischarged bankrupt.  Nonetheless I consider I am obliged to follow the reasoning of the Daemar cases insofar as it has a direct bearing upon the matter before me:  cf Farar Constructions.  Whatever my own concerns, they are decisions of long standing which have been considered and applied without demur including in decisions of this Court:  see eg Madden v Madden [1995] FCA 297;  Fitzpatrick v Keelty [2008] FCA 35.

39                        For present purposes, the first Daemar decision would seem to be authority for at least the proposition that an action for prerogative relief in relation to orders made in a proceeding in which (i) a cause of action is asserted by or against the applicant and (ii) the applicant is unsuccessful in prosecuting or resisting that claim, is to be characterised as an action to which s 60 applies if it is instituted prior to the applicant’s bankruptcy.  In other words the action for prerogative relief takes its character, in part at least, from the character of the rights sought to be vindicated in the proceedings in which the orders were made which have become the subject of the prerogative relief sought.  Hence there was the concern in the first Daemar decision with whether the “action” in that case affected Daemar’s “property” or his “personal interests” only for s 60(2) and (4) purposes.

40                        Though Kirby P adverted to the potential for “serious disharmony” between proceedings instituted prior to, and those commenced subsequent to, bankruptcy if s 58(1) and s 60(2) had differing compasses, I do not consider that such in fact is the legislative intention disclosed by these two provisions in the scheme of the Act at least insofar as it applies to an action having the character I have described in the preceding paragraph.  My view in this is reinforced by what I consider to be the clear legislative intent to exempt from control by the trustee, an action by the bankrupt which is in respect of any personal injury or wrong done to the bankrupt and this irrespective of when the action was instituted:  cf s 60(4) and s 116(2)(g)(i).  I conclude in consequence that such an action for prerogative relief, if it is not exempted by s 116(2)(g)(i), is vested in the trustee in bankruptcy and as such can be prosecuted, defended, compromised or discontinued by the trustee in the exercise of his or her powers under s 134(e), (j) and (o) of the Act.

41                        Mr Rana’s obvious motivation in instituting the show cause action was as a step along the way to establishing and vindicating the right he alleges he has to recover damages for a personal injury or wrong to him.  This is clear on the face of the application which joined all of the respondents in the proceeding before Lander J.  Moreover the grounds on which relief was sought were directed at those respondents.  It is not for me in this proceeding to consider whether he had standing to institute the action.  That is a matter for the High Court.  My present concern, rather, is with whether it can properly be said he is able to seek succour in s 116(2)(g) and hence challenge the trustee’s discontinuance of the proceeding.  I do not consider that he can do so. 

42                        I can state my reasons shortly.  First, though the various causes of action are widely cast in the Statement of Claim, at their centre are claims for breaches of contracts against some of the respondents and breaches of confidence, with satellite claims for negligence, defamation (to which I will refer separately below) and contraventions of s 52 of the Trade Practices Act against one or other of them.  The contracts in question were a series of settlement agreements with several of the respondents in respect of outstanding litigations against them.  The damages said to flow from all of these various wrongs, as best one can understand it, appears to be constituted primarily by a claim for $4,000,000 for “the loss and damage occurring to the applicant’s compensation and benefits claims against the Commonwealth … and its various agencies”.  It is to say the least difficult to see how such damages could be said to result from the wrong alleged.  They clearly are not relevantly damages for a “personal injury or wrong done to [him]”:  cf s 60(4) and s 116(2)(g).

43                        In Cox v Journeux [No 2] (1935) 52 CLR 713 Dixon J indicated (at 721) that the test whether the above Bankruptcy Act formula was satisfied was –

… whether the damages or part of them are to 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.

The losses of compensation and benefits from the Commonwealth which Mr Rana claims by way of damages are manifestly not so estimated.  Rather, they are presumably referable to entitlements which he alleges he has against the Commonwealth and its agencies but of which he has been deprived.  To the extent that these make up the major part of the damages he claims, then the causes of action to which they relate have passed to the Trustee to the exclusion of Mr Rana.

44                        As to Mr Rana’s alleged cause of action for damages against the University of Adelaide for defamation for which the University was alleged to be vicariously liable, the claim, while hopelessly misconceived, was in form for a personal injury or wrong done to him:  s 116(2)(g).  As such, it could be said not to be of a type that would vest in the Trustee.  Nonetheless, it failed for the same reason as did all of the claims made against the University.  The actions giving rise to those claims were done by a person acting in his private capacity and not as an employee of the University.  In this sense this claim was integrally interconnected in the proceedings with the other non-personal claims made in SAD 12 of 2008 which made up the real substance of that litigation.  In these circumstances I regard it as unnecessary here to enter upon any consideration of apportionment of Mr Rana’s claims against the University:  cf Faulkner v Bluett (1981) 52 FLR 115 at 115;  Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 at [47] and [51] for the purposes of A20 of 2008.  Apportionment was not raised before me in any event.  It was for the Trustee, not Mr Rana, to determine whether the show cause application would be prosecuted. 

45                        Distinctly, I am not satisfied that Mr Rana is seeking to vindicate or establish a “personal wrong or injury” for s 116(2)(g) purposes.  All of the claims he advanced (in SAD 12 of 2008) against all five respondents were struck out as abuses of process.  No legally intelligible claims were disclosed against four of the respondents;  the remaining claim against the University of South Australia was also struck out for the same reason, his Honour having found it was based on a document relied upon by Mr Rana which was “not authentic”:  Rana v University of Adelaide (No 2) at [7].  The proceedings before Lander J were doomed to failure.  The imagined claims made did not give that degree of authenticity to the rights asserted such as would justify characterising them as rights to recover damages for personal injury or wrong to the bankrupt for s 116(2)(g) purposes.  They are illusory rights. 

46                        The final comment I should make is this.  If I was not satisfied that, for whatever reason, the show cause action had not vested in the Trustee, I would not have declined to award Mr Rana relief on the grounds of futility.  The present proceedings is quite unlike Daemar [No 2].  The High Court, not this Court, is seized of the show cause application.  It is not for me to express a view on whether the High Court action is either competent or has any prospects of success.  It is for that Court to do so. 

CONCLUSION

47                        Having found that the proceeding A20 of 2008 was one for the Trustee and not Mr Rana to prosecute – if it was to be prosecuted at all – the Trustee’s decision to discontinue it was, on the material before me, unimpeachable.  That decision as I have indicated was the only one which raised any issue of substance for the purposes either of the AD(JR) Act or s 178 of the Bankruptcy Act.  I have already indicated why there are no grounds at all for providing relief against the Trustee in respect of his decisions (actual or alleged) concerning the other proceedings referred to in Mr Rana’s application.

48                        Accordingly, I will give summary judgment in favour of the respondents and will order that the proceeding be dismissed against each respondent.  I will also order the applicant pay the costs of each respondent.

Associate:

Dated:         18 September 2009