Papoutsakis v Tsiakis

1. [1]

   This is a notice of motion brought by the third defendant in proceedings commenced by the plaintiff on 9 November 2023. The third defendant seeks the following relief:-

   1. (1)

      An order that the proceedings be summarily dismissed as against the third defendant.

   2. (2)

      In the alternative, an order that the whole of the Statement of Claim filed on 9 November 2023 be struck out insofar as it is brought against the third defendant.

   3. (3)

      An order that the plaintiff pay the third defendant’s costs of the proceedings to date, including the costs of and incidental to the motion.

   4. (4)

      In the alternative to order 3, costs of the motion.

   5. (5)

      Such further or other order as the court thinks fit.

2. [2]

   Both the plaintiff and the third defendant are unrepresented. The third defendant confirmed that he was seeking to have the claim dismissed on the basis that the plaintiff’s claim cannot be maintained because he is an undischarged bankrupt and has no standing to bring the causes of action he alleges. He asserts that the causes of action are vested in the trustee of the plaintiff’s bankrupt estate and thus the instant proceedings have no prospects of success and are an abuse of the process of this court.

3. [3]

   On 14 May 2024, Elkaim AJ delivered a judgment summarily dismissing the proceedings against the fourth and fifth defendants: Papoutsakis v Scanlon [2024] NSWSC 562 (“Scanlon”). An appeal was dismissed as incompetent by Gleeson JA on 14 October 2024: Papoutsakis v Dunn [2024] NSWCA 246. The first and second defendants have never been served.

4. [4]

   I observe that Brett J of the Supreme Court of Tasmania, on the application of the plaintiff’s trustee in bankruptcy, refused an extension of time for the plaintiff to appeal against a decision of Holt AsJ refusing the plaintiff leave to file writs against some of the same defendants named in the present proceedings: Papoutsakis v Tenbensel [2024] TASSC 13.

5. [5]

   I do not repeat the history leading up to the matter which is set out in the judgments of Elkaim AJ and Brett J, and there was no evidence on those matters before me, although the plaintiff referred to what he perceived to be the unfairness leading up to and during his bankruptcy at some length in oral submissions.

6. [6]

   The sole issue for determination is whether, pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), the claim ought to be dismissed. That rule provides:-

7. [7]

   It is only in the clearest of cases that a court will make an order pursuant to r 13.4: Cappello v Homebuilding Pty Ltd [2024] NSWCA 88 at [4] per Kirk JA, citing Agar v Hyde (2000) 201 CLR 552 at [57] and General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 at 130.

Evidence

1. [8]

   Before me, the third defendant relied on his affidavit affirmed on 5 December 2024. For present purposes, the most significant item contained in that affidavit is an extract from the National Personal Insolvency Index. That document confirms that a sequestration order was made on 21 May 2018 and the plaintiff became a bankrupt on that day. He will be due for discharge on 31 July 2026. The plaintiff’s trustee is Mr Tenbensel, who was the defendant in the Tasmanian proceedings before Brett J. The plaintiff is thus an undischarged bankrupt. This accords with the facts found by both Elkaim AJ and Brett J. The plaintiff did not dispute the authenticity or correctness of that document and agreed that he was currently an undischarged bankrupt.

2. [9]

   The plaintiff relied on his affidavit sworn on 5 December 2024 and made written and oral submissions. In his affidavit, the plaintiff makes allegations which appear to allege negligence and fraud against the third defendant. He appears to rely on s 116(2)(g) of the Bankruptcy Act 1966 (Cth) as permitting him to maintain the proceedings.

3. [10]

   In addition, I admitted into evidence an email dated 6 February 2025 from the plaintiff’s trustee Mr Tenbensel, which copied in the plaintiff and third defendant. Neither objected to that document being marked as an exhibit. That document confirms that the plaintiff is an undischarged bankrupt, due for discharge in July 2026. Mr Tenbensel says that he has not given his consent to the plaintiff to commence proceedings “in respect of rights of action which vested in me on 21 May 2018”. He expresses the view that the plaintiff has no standing to initiate the instant proceedings. Mr Tenbensel’s opinion is, of course, not determinative.

Consideration

1. [11]

   The relevant law was set out by Kunc J in Singh v Harrowell & Ors [2023] NSWSC 420 at [85]-[90]:-

2. [12]

   In this case, the plaintiff says that s 116(2)(g) of the Bankruptcy Act permits this action, as it is an action for personal injury.

3. [13]

   I observe that the Statement of Claim, which is opaque and very difficult to understand, says the following at [19]:-

4. [14]

   Like Elkaim AJ (see Scanlon at [10]-[11]), I asked the plaintiff if his personal injuries were caused by the bankruptcy and its effects. The plaintiff was unequivocal in his response that it was the bankruptcy which caused his illnesses. That being the case, s 116(2)(g) does not provide an exception which permits the plaintiff to pursue his action against the third defendant: see Samootin v Shea [2010] NSWCA 371 at [79] per Campbell JA and Kovarfi v BMT & Associates Pty Ltd (No 2) [2014] NSWSC 100 at [32]-[33] per Campbell J.

5. [15]

   The plaintiff also relied on ss 265 and 60(3) of the Bankruptcy Act as exceptions which permit him to commence the proceedings without the consent of his trustee. Section 265 deals with offences when a bankrupt fails to disclose property. It provides:-

6. [16]

   Nothing in that section assists the plaintiff. Section 60 of the Bankruptcy Act, which deals with stays of proceedings and related matters, provides:-

7. [17]

   Nothing in s 60, and in particular s 60(3) assists the plaintiff. I observe that he commenced the instant proceedings more than 5 years after the sequestration order.

8. [18]

   Contrary to the plaintiff’s submissions, no exception applies which permits him to bring the action against the third defendant.

Conclusion

1. [19]

   The plaintiff has no standing to bring the proceedings because he is an undischarged bankrupt. The proceedings are therefore untenable and an abuse of process. I will therefore make the primary order sought by the third defendant.

2. [20]

   I make the following orders:-

   1. (1)

      The proceedings are summarily dismissed against the third defendant.

   2. (2)

      The plaintiff is to pay the third defendant’s costs of the proceedings and of the notice of motion.