Lovell v Penkin, in the matter of the bankrupt estate of Kevin Michael Penkin [2008] FCA 637

Lovell v Penkin, in the matter of the bankrupt estate of Kevin Michael Penkin [2008] FCA 637

Leave should be granted to Mr Lovell to continue his negligence proceedings in the Supreme Court of Western Australia against Mr Penkin, as such claims (even when pleaded solely in negligence) are at least arguably provable under the Bankruptcy Act due to the contractual relationship between solicitor and client. Given the public interest in insurance coverage, and the complexity and unsettled nature of the law regarding provable debts in this context, it is appropriate to grant leave (with conditions) rather than to require a final determination of provability at this stage.

Jurisdiction
Australia
Judgment Date
09 May 2008
Procedural Posture
Bankruptcy Application for Leave / Application for Leave to Continue Proceedings; Judgment
Outcome
Leave granted with conditions.
Legal Topics
['stay of Proceedings' 'provable Debt in Bankruptcy' 'leave to Proceed' "solicitor's Professional Negligence" 'insurance and Bankruptcy']
['bankruptcy' 'insolvency' 'professional Negligence'] ['stay of Proceedings' 'provable Debt in Bankruptcy' 'leave to Proceed' "solicitor's Professional Negligence" 'insurance and Bankruptcy']

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Procedural Posture

Bankruptcy Application for Leave / Application for Leave to Continue Proceedings; Judgment

Legal Issues

  1. 1 ['Whether leave is required to proceed with a negligence claim against a solicitor who is bankrupt' 'Whether a claim in negligence alone against a solicitor is a provable debt in bankruptcy' 'Whether the existence of compulsory professional indemnity insurance affects the provability of the claim']

Ratio Decidendi

Leave should be granted to Mr Lovell to continue his negligence proceedings in the Supreme Court of Western Australia against Mr Penkin, as such claims (even when pleaded solely in negligence) are at least arguably provable under the Bankruptcy Act due to the contractual relationship between solicitor and client. Given the public interest in insurance coverage, and the complexity and unsettled nature of the law regarding provable debts in this context, it is appropriate to grant leave (with conditions) rather than to require a final determination of provability at this stage.

Court Disposition

Leave granted with conditions.

Orders

  • ['Avon Francis Lovell has leave (to the extent necessary) to continue and take fresh steps in the Supreme Court of Western Australia proceeding against Kevin Michael Penkin (CIV 2355 of 2005).' "The leave is conditional on Mr Lovell undertaking in writing within 14 days not to seek final relief without giving seven...