Sydney Adventis Hospital Limited v Nemes [2011] FCA 48 (2 February 2011)

Last Updated: 3 February 2011

FEDERAL COURT OF AUSTRALIA

Sydney Adventis Hospital Limited v Nemes [2011] FCA 48

Citation:		Sydney Adventis Hospital Limited v Nemes [2011] FCA 48
Parties:		SYDNEY ADVENTIST HOSPITAL LIMITED v PETER A NEMES T/AS NEMES THOMAS & CO
File number(s):		NSD 9 of 2011
Judge:		JAGOT J
Date of judgment:		2 February 2011
Catchwords:		BANKRUPTCY AND INSOLVENCY – application for leave to continue proceedings
Legislation:		Bankruptcy Act 1966 (Cth)
Date of hearing:	2 February 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	5
Counsel for the Applicant:	Mr D Aquilina
Solicitor for the Applicant:	S R Law
Counsel for the Respondent:	The respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 9 of 2011

BETWEEN:	SYDNEY ADVENTIST HOSPITAL LIMITED Applicant
AND:	PETER A NEMES T/AS NEMES THOMAS & CO Respondent

JUDGE:	JAGOT J
DATE OF ORDER:	2 FEBRUARY 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Leave be granted to the applicant pursuant to s 58(3)(b) of the Bankruptcy Act 1966 (Cth) to commence and continue with the conduct of District Court of New South Wales proceedings number 2010/292102 and to take any fresh step in those proceedings.
2. Each party pay its own costs of the application.
   

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 Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 9 of 2011

BETWEEN:	SYDNEY ADVENTIST HOSPITAL LIMITED Applicant
AND:	PETER A NEMES T/AS NEMES THOMAS & CO Respondent

JUDGE:	JAGOT J
DATE:	2 FEBRUARY 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is an application by the Sydney Adventist Hospital Limited for leave to continue with certain District Court proceedings. Leave is required because the defendant to those proceedings is an undischarged bankrupt. The application is supported by two affidavits: an affidavit of David Simons, solicitor, sworn 12 January 2011, and another affidavit by the same solicitor, sworn 1 February 2011. Those affidavits establish that the District Court proceedings are for damages for alleged professional negligence by the solicitor in respect of certain solicitor-client relationships with the Sydney Adventist Hospital.
2. The evidence shows that Sparke Helmore solicitors have been instructed by LawCover Pty Ltd (LawCover), the respondent’s professional negligence insurer, to act in defence of the proceedings. Sparke Helmore have obtained the trustee in bankruptcy’s consent to their so acting. In addition, acting on LawCover’s instructions, Sparke Helmore have advised in a letter of 31 January 2011 that although they are not instructed to consent to the application for leave to proceed, they do not oppose that application. There is also evidence of an email of 31 January 2011 from Stuart Cunningham of the office of the trustee in bankruptcy, which states that it is confirmed that the trustee does not oppose leave being granted to continue with the District Court proceedings.
3. In these circumstances, where the claim for damages against the defendant in the District Court proceedings for alleged professional negligence can only proceed if leave is granted under section 58(3)(b) of the Bankruptcy Act 1966 (Cth), and where LawCover has indicated that it is acting on behalf of the defendant in relation to the District Court proceedings, I consider that leave should be granted to the applicant as sought.
4. There was a question as to whether any conditions should be imposed on the grant of leave. It seems to me that the applicant in these proceedings, being the plaintiff in the District Court proceedings, as a practical matter, will know whether Law Cover continues to provide cover and defend the proceedings on behalf of the defendant. If that situation changes, it will then be a matter for the applicant to determine whether there is any utility in continuing the proceedings. For this reason I do not think any condition on the grant of leave is necessary.
5. There is an application for costs against the respondent in this application, who is, of course, the defendant in the District Court proceedings. In relation to this application, which has not been opposed by any person (including LawCover, which acts on behalf of the defendant in the District Court proceedings), there should be no order as to costs. The reason for this is that the applicant had to come to this Court in order to obtain the leave; it was unavoidable, and it was not opposed.
   

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate:

Dated: 3 February 2011