Fletcher v Westpac [2012] WASCA 154

A lender exercised its power of sale and the borrower sued for breach of duty of care to inform him the sale was to take place. The court found for the bank and the borrower appealed. Before the appeal was heard the borrower became bankrupt.

Under section 60 of the Bankruptcy Act, an action, except an action for personal injury or wrong done, commenced by a person who subsequently becomes a bankrupt is stayed until the trustee in bankruptcy makes an election to prosecute or discontinue the action.

The question for the court was whether the appeal was in respect of a personal injury or wrong, which in turn depends upon the action itself which gave rise to the appeal. The court noted that the initial action was framed entirely in terms of the losses in respect of the value of the property which the borrower alleged resulted from the lender’s alleged breaches. There was no claim in respect of any personal injury or wrong. The court found that the bankrupt was not entitled to pursue the appeal in his own name. Since the trustee did not make an election to continue the appeal, it was deemed abandoned.

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