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  • Unreported Judgment

Hamilton v Young

 

[2007] QSC 160

Reported at [2008] 1 Qd R 507

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Hamilton v Young [2007] QSC 160

PARTIES:

NATASHA MARIE HAMILTON
(applicant)
v
PAULINE YOUNG
(respondent)

FILE NO:

2 of 2007

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

6 July 2007

DELIVERED AT:

Supreme Court at Brisbane

HEARING DATE:

1 March 2007

JUDGE:

Douglas J

ORDER:

Application dismissed

CATCHWORDS:

BANKRUPTCY –  BANKRUPT – Proceeding instituted by bankrupt before sequestration –Effect of bankruptcy on proceeding –Trustee did not elect to prosecute proceeding –Whether bankrupt may continue proceeding in her own name –Whether action is in respect of any personal injury or wrong done to the bankrupt

Bankruptcy Act 1966 (Cth), s 60(4), s 116(2)(g)(i)

Bryant v Commonwealth Bank of Australia (1997) 75 FCR 545, considered

Cattanach v Melchior (2003) 215 CLR 1, applied

Cox v Journeaux (No. 2) (1935) 52 CLR 713, considered

Daemar v Industrial Commission of NSW (1988) 12 NSWLR 45, considered

Faulkner v Bluett (1981) 52 FLR 115, considered

Melchior v Cattanach [2001] QCA 246, applied

Murray v Whiting [2002] QSC 257, applied

Rogers v Asset Loan Co. Pty Ltd [2006] FCA 434, considered

COUNSEL:

J Lee for the applicant

JA McDougall for the respondent

SOLICITORS:

Keith Scott & Associates for the applicant

Flower & Hart for the respondent

  1. Douglas J:  The question in this matter is whether a claim for damages for the cost of raising an unplanned child is one that can be characterised as a claim for damages for “personal injury or wrong” within the meaning of those words in s 60(4) and s 116(2)(g)(i) of the Bankruptcy Act 1966 (Cth). 
  1. If it is properly characterised in that fashion then the applicant may proceed with all of her claim for damages for negligence arising out of a doctor’s failed attempt to implant a contraceptive device that the applicant says led to two unplanned pregnancies, one of which was terminated and the second of which led to the birth of a child.
  1. If the claim for the cost of raising that child is not properly characterised as an action in respect of any personal injury of wrong done to the applicant then that part of the action would be property vested in her bankruptcy trustees. They have been informed of this action but did not wish to be represented. The official trustee had previously reserved its rights to commence new proceedings in respect of that claim and has now appointed other trustees to be her bankruptcy trustees.
  1. The claim for the cost of raising the child is said, by the respondent, to be a claim for pure economic loss, capable of being brought by either or both parents, and not one that meets the description of a personal injury or wrong actionable by the applicant.

Submissions

  1. The applicant’s submission was that her claim, whether for personal injuries or for pure economic loss, was not vested in her bankruptcy trustees. Her principal argument was that, where s. 116(2)(g)(i) of the Bankruptcy Act speaks of “personal injury or wrong”, the word “wrong” whether by itself or together with the word “personal” means something different to “personal injury”.  In other words the phrase, in her submission, is wide enough to embrace both the personal injury aspect of her claim and the “pure economic loss” aspect of it relating to the cost of bringing up her child. Mr Lee for the applicant also submitted that s. 60(4) of the Act in providing that the stay of proceedings otherwise imposed by s. 60 did not apply to an action commenced by a bankrupt in respect of any personal injury or wrong to the bankrupt should bear the same meaning as the same words used in s. 116(2)(g)(i) and that s. 60(4) positively allowed the plaintiff to continue her proceeding without that chose in action vesting in the trustees.
  1. Mr McDougall for the respondent submitted that the failure of the official trustee to make an election to prosecute the applicant’s claim for economic loss for raising her child had the consequence that her proceedings were stayed pursuant to s. 60(2) of the Act. In arguing that the claim for the cost of raising the child was a claim for pure economic loss be relied upon the decision of Chesterman J in Murray v Whiting [2002] QSC 257 where his Honour had referred to the decision of the Court of Appeal in Melchior v Cattanach [2001] QCA 246 as accepting that the claim in respect of maintaining the child was one for pure economic loss; see at [19]-[20] of Chesterman J’s decision.  He submitted that the High Court decision in the same matter, Cattanach v Melchior (2003) 215 CLR 1, also accepted that the claim for the cost of raising the child in that case was a separate and distinct claim for pure economic loss;  see at 9, 12-13, 13-14, 26; paras [4], [14], [17]-[19] and [48].  In contrast, Kirby J in his dissenting reasons characterised the case as one of direct injury to the parents, consequential, in the case of the mother, on the “profound and unwanted physical events (pregnancy and childbirth) involving her person”; at 57-58; [148]-[149].  See also Hayne J at 72; [193].
  1. Mr McDougall also, in relying upon Murray v Whiting, drew attention to the statement by Chesterman J at [27] that the facts necessary to establish the cause of action for damages for the economic loss incurred in raising the child did not include a personal injury to either plaintiff.  Mr Lee sought to distinguish that decision on the basis that it did not apply to the proper interpretation of the Bankruptcy Act, being concerned with whether there was a statutory limitation barring a claim for economic loss under the Limitation of Actions Act 1974.

Discussion

  1. The test as to the meaning of the words “personal injury or wrong done to the bankrupt” recognised by Dixon J in Cox v Journeaux (No. 2) (1935) 52 CLR 713, 721 is whether or not 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.  Lockhart J in the Federal Court in Faulkner v Bluett (1981) 52 FLR 115, 118-122, in discussing the history of the interpretation of the section under the Act and the “common law of bankruptcy” said at 119 that:-

“The common thread running through these cases is that where the primary and substantial right of action is direct pecuniary loss to the property or estate of the bankrupt, the right to sue passes to the trustee notwithstanding that it may have produced personal inconvenience to the bankrupt … Where the essential cause of action is the personal injury done to the person or feelings of the bankrupt the right to sue remains with the bankrupt.

There is still some doubt whether a right of action passes to the trustee where one and the same cause of action results in substantial damage to the property of the bankrupt as well as substantial injury to his person or annoyance to his feelings … In England the accepted view seems to be that such a cause of action passes to the trustee so far as it relates to the property of the bankrupt, and remains with the bankrupt so far as it relates to his person or feelings …”

  1. He considered the same issues later as a member of the Full Court of the Federal Court in Bryant v Commonwealth Bank of Australia (1997) 75 FCR 545 where the Court concluded that the loss complained of there arose from direct pecuniary loss to the bankrupt’s property; see at 564 in the judgment of O’Loughlin and Merkel JJ.  Lockhart J also discussed cases where there were mixed causes of action some of which vested in the trustee and some did not and other cases where courts have declined to sever the proceedings; see at 548-549.
  1. I have not been asked to stay the continuance of the applicant’s action for damages for personal injuries but to stay that part of her action claiming damages for the cost of raising her child. The possibility of severance of a claim in the appropriate circumstances appears to be accepted; see Daemar v Industrial Commission of NSW (1988) 12 NSWLR 45, 56B-C; Rogers v Asset Loan Co. Pty Ltd [2006] FCA 434 at [47].
  1. Where, as here, the right to sue would lie either with the mother or father of the child or with both of them, I cannot conclude that the essential components of the cause of action include any personal injury done to the mother or to her feelings. It seems to me that the word “wrong” is used in conjunction with the words “personal injury” to identify a personal tort affecting the person or feelings of the bankrupt, not, as here, the loss to her and the father of the child of property, caused by the expense of bringing up their child. The view that the action for that loss constitutes a separate cause of action for pure economic loss reflected in the decisions of Chesterman J in Murray v Whiting and the Court of Appeal and the High Court in Cattanach v Melchior requires the conclusion that this part of the applicant’s claim vests in her bankruptcy trustees.  

Order

  1. Therefore the application should be dismissed. I shall hear the parties about any consequential orders and costs.
Close

Editorial Notes

  • Published Case Name:

    Hamilton v Young

  • Shortened Case Name:

    Hamilton v Young

  • Reported Citation:

    [2008] 1 Qd R 507

  • MNC:

    [2007] QSC 160

  • Court:

    QSC

  • Judge(s):

    Douglas J

  • Date:

    06 Jul 2007

Litigation History

Event Citation or File Date Notes
Primary Judgment [2008] 1 Qd R 507 06 Jul 2007 -

Appeal Status

No Status