Bendel v Pattison
[2003] FMCA 75
•7 March 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BENDEL v PATTISON | [2003] FMCA 75 |
| BANKRUPTCY – Application to discharge and set aside notice of objection pursuant to ss.178 and 179 of the Bankruptcy Act – whether application may be made under ss.27 and 30 of the Act – summary dismissal – relevance of earlier decisions by Inspector-General, Federal Court and AAT – re-litigation – abuse of process. PRACTICE AND PROCEDURE – Summary dismissal. |
Bankruptcy Act1966, ss.27, 30, 178, 179
Re Wheeler; ex parte Wheeler and Halse (1994) 54 FCR 166
Macchia v Nilant (2001) FCA 7
State Bank of New South Wales v Stenhause (1977) ATR 81-423
Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404
General Steel Industries Inc v Commissioner of Railways (1964) 112 CLR 125 Dey v Victorian Railways Commission (1949) 78 CLR 62
McGoldrick v Official Trustee in Bankruptcy [1993] 47 FCR 547
Wilson v Commonwealth of Australia [1999] FCA 219
State Bank of New South Wales Ltd v Stenhouse Ltd and ors [1997] Aust Torts Reports 81-423
| Applicant: | DAVID BENDEL |
| Respondent: | PAUL ANTHONY PATTISON (AS TRUSTEE OF THE BANKRUPT ESTATE OF DAVID BENDEL NO. VB 1083 OF 1996) |
| File No: | MZ228 of 2002 |
| Delivered on: | 7 March 2003 |
| Delivered at: | Melbourne |
| Hearing Date: | 3 June 2002 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Counsel for the Applicant: | Mr P Bornstein |
| Solicitors for the Applicant: | Lewis Holdway |
| Counsel for the Respondent: | Ms M Kennedy |
| Solicitors for the Respondent: | Charles Fice |
ORDERS
The Amended Application filed 4 April 2002 be dismissed.
The Applicant shall pay the Respondent’s costs including any reserved costs in accordance with the Federal Court Scale and in default of agreement to be taxed pursuant to Order 62 of the Federal Court Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ228 of 2002
| DAVID BENDEL |
Applicant
And
| PAUL ANTHONY PATTISON (AS TRUSTEE OF THE BANKRUPT ESTATE OF DAVID BENDEL NO. VB 1083 OF 1996) |
Respondent
REASONS FOR JUDGMENT
Introduction
DAVID BENDEL (the Applicant) by an amended application filed on
4 April 2002 seeks orders pursuant to ss.30, 178 and/or 179 of the Bankruptcy Act 1966 to have a notice of objection dated 27 November 1999 to his discharge from bankruptcy either withdrawn or set aside and declared invalid. The effect of those orders would be to immediately discharge the Applicant from bankruptcy as if the notice of objection dated 27 November 1999 was never filed.
The notice of objection had been filed by PAUL ANTHONY PATTISON (the respondent) who is the trustee of the bankrupt estate of the Applicant who had been made bankrupt by a sequestration order made on 19 April 1986.
By an application filed 17 April 2002 the respondent seeks orders as follows: -
“(1)That the amended application filed by the applicant
David Bendel dated 5 April 2002 ("the proceeding") be stayed or dismissed under Rule 13.10 of the Federal Magistrates Court Rules 2001 on the ground that in relation to the proceeding:
(a)no reasonable cause of action is disclosed; or
(b)the proceeding is frivolous or vexatious; or
(c)the proceeding is an abuse of the process of the Court.
(2)Alternatively to (1) that pursuant to Rule 21.02 of the Federal Magistrates Court Rules 2001 the applicant give security for the costs of the respondent in defending the proceeding in the sum of $27,775 within seven days of the date of this order hereof failing which the proceeding herein be dismissed with costs.”
The respondent in his application has also sought orders for costs and such other orders as the Court sees fit. It should be noted at the outset that this issue was argued as a preliminary matter and the parties agreed that I would not further consider security for costs until after I had determined the Respondent’s application for what I describe as effective summary dismissal of the amended application of the Applicant.
Rule 13.10 of the Federal Magistrates Court Rules provides: -
“The Court may order that a proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding, if it appears to the Court that in relation to the proceeding or claim for relief:
(a)no reasonable cause of action is disclosed; or
(b)the proceeding is frivolous or vexatious; or
(c)the proceeding is an abuse of the process of the Court.”
Background
As indicated, a sequestration order was made against the Applicant on 19 April 1996. Prior to that date it is relevant to note that on
22 November 1994 consent orders were obtained in the Family Court between the Applicant and his former wife Susan Bendel whereby the Applicant transferred two properties to her and she assigned her interest to the Applicant in Sash Investments Pty Ltd (Sash) as trustee of the Susan Bendel family trust. In the balance sheets for Sash as at
30 June 1995 an amount of $699,938 is shown as an indebtedness to Susan Bendel. Those accounts prepared in 1996 were subsequently claimed to be inaccurate by the Applicant and reference is made to those accounts in affidavit material before this Court and indeed further reference had been made to them in a request for review of an earlier decision of the respondent to object to a discharge of the Applicant's bankruptcy.
However it should be noted that in proceedings before the
Federal Court of Australia Heerey J on 26 November 1997 relied upon those accounts in making a finding against Sash as trustee of the Susan Bendel family trust which had claimed a debt against the Applicant based upon loan agreements which were said to have been the subject of acknowledgment of debts executed in 1988 and 1989.
It was found by Heerey J that the documents supporting the claim by Sash had been back-dated by the Applicant and this became apparent upon a close examination of the original of the 1989 agreement which confirmed the date line including the typed figures "199" and that they had been overwritten so the date read "1989". In a 1988 agreement a duty stamp appeared above the same typed figures "199" and the figures "1988" had been written above the duty stamp. It was only in
re-examination that the Applicant admitted that the documents had been back-dated. Not surprisingly the Federal Court made the following statement in relation to the evidence of the Applicant:
“Mr Bendel displayed no contrition after being caught out in a brazen attempt to deceive this Court by the use of false documents.”
The applications before the Federal Court included an application by the bankrupt, the Applicant, to review a decision by the respondent not to call a meeting of creditors and as indicated, the Court also considered an application by Sash which had lodged a proof of debt that had been rejected by the Court. Both applications were dismissed and in addition to the reference cited above the Court also stated the following:-
“In any event there is a quite independent ground for rejecting the claim. This arises from the fact that the books of account show an indebtedness to Susan Bendel appearing in the balance sheets of the company as at 30 June 1995 in the amount of $699,938. Since Mr Bendel acquired all the interest of Mrs Bendel in the trust there would be a credit balance and not a debit balance in his favour. The application by Sash Investments is dismissed.”
It is clear from the decision in the Federal Court that it has relied upon the consent orders made in the Family Court of Australia to which I have already referred. Following the decision by the Federal Court a notice of objection pursuant to s.149D(1)(n) of the Bankruptcy Act was filed by the respondent on 24 September 1998. The first objection was subsequently upheld by both the Inspector General and the Administrative Appeals Tribunal (the AAT).
A second notice of objection filed on 27 November 1999 (the relevant notice) which is subject to the amended application before this Court was filed, it is claimed as a result of no reply being received by the respondent from the Applicant in relation to letters requesting an account of assets and liabilities of Sash dated 13 and 28 September 1999. It is not disputed that as part of the chronology the bankrupt by letter dated 16 December 1999 requested that the objections lodged on 24 September 1998 and 27 November 1999 be withdrawn. A further letter dated 21 February 2000 was forwarded by the bankrupt to the respondent confirming the request that the objection be withdrawn. The Inspector General advised by letter dated 10 February 2000 that the relevant notice was confirmed.
The bankrupt then appealed to the AAT. The hearing occurred over a period of three days in November 2000. A decision dated 9 March 2001 of the AAT confirmed both the first objection and the relevant objection.
In its decision the AAT referred to the background as follows: -
“4.The background of the first and third objections was that, under consent, orders of the Family Court, dated 22 November 1994 following the divorce of David Bendel and Susan Bendel, Susan Bendel assigned and released to David Bendel or his nominee all her right, title and interest (including any interest she may have standing to her credit in any loan account) in Sash Investments Pty Ltd as trustee of the Susan Bendel Family Trust. In financial statements of the trust as at 30 June 1995, apparently prepared in approximately May 1996, a debt of $669,938 to Susan Bendel was included. It was that debt which the trustee believes had not been disclosed. In seeking review by the respondent of the trustee's objection a copy of the balance sheet of the Susan Bendel Family Trust as at 30 June 1996 was provided which showed no liability to Susan or David Bendel. The trustee took the view that no satisfactory explanation as to the reasons for the disappearance of the apparent asset as at 30 June 1995 had been provided and gave notice of the objection under s.149D(1)(g)(ii).
5.
Prior to consideration of the evidence, it should be said that the Tribunal had difficulty in establishing the facts of this matter. While Mr David Bendel did not have legal representation he is an accountant of long experience and it would have been expected that he could have explained in clear terms the basis upon which the debt of $669,938 appeared in the trust accounts and subsequently disappeared. Unfortunately this did not happen. It seems the origins of his bankruptcy was a dispute with a firm of accountants, Lowe Lippmann, of which he was formerly a partner. Clearly, the dispute had become bitter and
Mr Bendel found himself unable to concentrate his evidence on the relevant matters to the issues before the Tribunal. Mr Bendel produced a large number of documents and it has been a major task to distil from those documents and the oral evidence of Mr Bendel the facts relevant to these applications.
6.Mr Bendel denied that he received anything of value from his former wife, Susan. …”
In its reasons for decision the Tribunal recited the passage to which I have already referred from the judgment of Heerey J in the Federal Court and stated the following:-
“12.… Mr Bendel has had many opportunities during the pre-hearing procedures of this Tribunal and at the hearing to provide evidence to satisfy the respondent and ultimately the Tribunal that the relevant asset of the loan account to the trust either did not exist or was some other figure. He failed to do so. As a consequence the Tribunal has no option but to affirm the decision of the respondent to confirm the objection to discharge on the grounds of failing to disclose the beneficial interest in the Susan Bendel family trust.”
13.It also follows that no satisfactory explanation as to why no money was received from the assets the respondent's confirmation of the objection under s.149D(1)(g)(ii) should be affirmed.
Both during the course of submissions and in the affidavit of the respondent reference was made to the AAT's decision and it was asserted without contradiction that the decision of the AAT had not been the subject of any appeal pursuant to s.44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). Hence it was claimed that the bankrupt in seeking to set aside the relevant notice of objection is endeavouring to bring before this Court a matter which has already been the subject of a determination by the AAT. In general terms it is submitted by the respondent that the bankrupt should not be permitted to again seek to rely upon reconstructed accounts which had been rejected by the AAT.
Submissions
The respondent in the light of the background to which I have referred submitted specifically that whilst the amended application provides for orders pursuant to ss.178 and/or 179 of the Bankruptcy Act whereby the notice of objection be set aside or in the alternative be withdrawn along with consequential orders it is noted that the substantive amendment to the application involves similar orders pursuant to the powers under ss.27 and 30 of the Bankruptcy Act.
In relation to s.178 the respondent has submitted that that provides a supervisory jurisdiction over the conduct of the trustee and that the bankrupt in the circumstances needs to show a ground on which the trustee's administration of the affairs should be reviewed. The power is judicial and cannot be a subject of an administrative decision by the Court simply substituting its decision for that of the trustee. It was submitted that the Court which hears the application should not make a different decision simply because it decides to act differently to the trustee. Reference was made respectively to the decisions of
Re Wheeler; ex parte Wheeler and Halse(1994) 54 FCR 166 at 167-8 and Macchia v Nilant (2001) FCA 7 at par 38. It is submitted that the power of the Court to make orders under ss.27 and 30 are in aid of its jurisdiction under the Bankruptcy Act and does not extend that jurisdiction. The Court should not be able to intervene simply because it disagrees with any decision made by the trustee but only if some error is demonstrated.
In general terms as indicated earlier, the respondent submits that this is merely an attempt to re-litigate issues already the subject of decisions by the Inspector General and the AAT. In those circumstances, the attempt at re-litigation can constitute an abuse of process (see State Bank of New South Wales v Stenhause (1977) ATR 81-423, Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404). The reliance upon the reconstructed accounts it is submitted is the same basis for the challenge to the notices in the AAT.
It was submitted the application therefore is both an abuse of process and oppressive. In support of that submission in summary form the respondent in written submissions relies on the following: -
“(a)The correctness of the trustee's decision was the very same issue given extensive time and consideration by the AAT.
(b)The decision of the AAT was final and binding and good in law unless and until set aside by a court of competent jurisdiction (see R v Balfour (1987) 17 FCR 26).
(c)If the bankrupt were to be successful before this Court there would be inconsistency with the decision of the AAT which the bankrupt has elected not to challenge.
(d)The bankrupt was given ample opportunity to re-litigate the appropriateness of the objection and in particular was given every opportunity to demonstrate why 'original account' were wrong.
(e)The only 'fresh evidence' is a bald statement from an accountant that the reconstructed accounts 'give a true and fair account' without provision of any new source documentation notwithstanding that the lack of explanation and source documentation were the very matters that caused the AAT concern. Given the paucity of this evidence and the delay in its production the evidence of Mr Scott should not now justify an interference with the trustee's decision.
(f)The oppression to the trustee of permitting this matter to be re-litigated is high as is already evident from the voluminous material filed to date
(g)The decision is analogous to R v Balfour wherein a prosecutor sought to re-litigate in the Federal Court an issue as to the validity of a repayment certificate upon which he had already lost in the New South Wales Supreme Court. Notwithstanding that not all the parties in the Federal Court had been parties in the Supreme Court, Wilcox J held that this was an abuse of process because the prosecutor was seeking to reverse the effect of a decision in the Supreme Court.”
The respondent further submitted that in any event the material does not disclose any reasonable course of action within the principle referred to in the Nilant decision. There is no reason to suggest, it was submitted, that the trustee fell into error in this case particularly given his decision was subsequently confirmed. It was submitted the bankrupt has also provided no particulars for the suggestion that the form of the notice does not comply with s.149C of the Act.
In support of the issue of whether or not the matter should be withdrawn it was submitted that the bankrupt has not adduced material to support the existence of any "act, omission or decision" in relation to the withdrawal.
The respondent submitted that in the alternative there is no material upon which the Court can rely to justify intervention pursuant to its supervisory jurisdiction. The bankrupt's case, it is submitted, is clearly untenable (see General Steel Industries Inc v Commissioner of Railways (1964) 112 CLR 125 at 129 per Barwick CJ). There is no real question to be determined in this case (see Dey v Victorian Railways Commission (1949) 78 CLR 62 at 91 per Dixon J).
The Applicant in submissions made on his behalf, referred to the relevant objection and the background in this matter. It seemed clear that the issue sought to be agitated before this Court was similar to that agitated before the AAT and in particular reference was made to a problem in the administration as to whether the loan account in question was actually worth anything. Reliance was placed upon the evidence of the accountant, referred to as an independent chartered account, as being new material which the Court should take into account in this application. It is said that is new material which was not before the AAT and nor has it been before the Inspector General.
It was submitted, however, that the real issues before this Court were not raised before the AAT and further it was argued that the AAT was not assisted by the Applicant being represented as he represented himself on that occasion. It is incumbent upon the respondent to show that there is nothing essentially even "remotely arguable" in order to succeed in the application to dismiss the bankrupt's application.
An issue argued before the AAT was connected with the first ground of objection which it was submitted is no longer relevant as the Court is dealing with the second objection.
In general terms it was submitted that applying the law in accordance with decisions included Dey's case that the respondent is not entitled to succeed in the current application to strike out the Applicant's claim. If there is any doubt about the issues before the Court or if the Court is satisfied that there is at least an issue which is arguably left open, then it was submitted that is sufficient to enable the Applicant's application to proceed.
Reliance was placed upon correspondence from the Applicant to the respondent by letter dated 7 December 2001 requesting that the relevant notice be withdrawn. However no decision was made in relation to that matter and it was submitted that in the circumstances the request was not dealt with and that then constitutes an omission to make a decision. It is noted that there was a letter from the respondent advising the Applicant that he would deal with the request in the new year. That letter was dated 20 December 2001. A further letter dated 21 December 2001 from the Applicant's solicitors advised the respondent that instructions had been received to apply to the Court to have the decision "refusing to withdraw the objection" reviewed early in the new year. Nevertheless it was submitted that the respondent had failed to deal with the matter and this together with the other issue raised is sufficient, it was submitted, to establish a triable issue in the circumstances.
It was submitted that simply because the AAT has dealt with similar issues and that the complaints of the Applicant had been agitated and ultimately were the subject of a decision by the AAT that there is no basis upon which it could be said that the doctrine of res judicata applies. It was submitted the parties are not the same before the Court as they were before the AAT and not even an issue estoppel arises because the issues not said to be agitated were not raised properly before the AAT. In further support of this submission, again reference was made to the Applicant not being legally represented. In response to the suggestion that an appeal could have been lodged on a question of law from the AAT decision it was suggested that there was not going to be any legal error based upon the material put before the Tribunal and because the Applicant in circumstances where it might be said that the Applicant had made "a complete mess of presenting his case before the AAT" the proper material and proper submissions were not put, it was submitted. The Applicant, it was submitted, was entitled to put those proper submissions to the Court under the supervisory jurisdiction and should not be shut out from doing so by the respondent.
Reliance was placed upon the decision in the McGoldrick v Official Trustee in Bankruptcy [1993] 47 FCR 547. That case is authority for the proposition that it may be possible for a Court to review a trustee’s decision pursuant to s.178 of the Bankruptcy Act where a decision has been to object to a bankrupt’s discharge. On that basis it was submitted there was still sufficient for the Applicant to argue a point which was left open, that is an issue not determined by the AAT.
The Respondent by way of reply submitted that reliance is placed upon both the submission that there is no arguable case and in the alternative in any event, that the application is an abuse of process and falls within the principles relied upon in those cases that deal with re-litigation which may then lead to the conclusion that there has indeed been an abuse of process.
As to the issue of the Applicant being unrepresented and not putting or not adequately putting what is now said to be put on his behalf, it was submitted that the Applicant is a well qualified accountant and was perfectly able to provide an explanation when given the opportunity. He had sought review on two occasions before the Inspector General and the AAT and it was submitted it is not in the interests of the integrity of the system or indeed in the interests of justice to allow the Applicant to pursue the matter further.
In relation to the issue that is said to have been missed by the AAT or not properly put it was submitted that the terms of the objection pursuant to s.149D(1)(g)(ii) is that there is somebody within a five year period disposing of property but failing to explain adequately to the trustee why no money was received as a result of disposal. It was submitted that at the time the trustee was looking at that transaction it is easy to understand the concern of the trustee. It was submitted in the present case there is a disposal of two properties. There are apparent accounts suggesting there was an amount of about $669,000 supplied effectively in return but with the bankrupt asserting that there was no liability and no money and he received nothing. The Applicant had challenged the accounts before the AAT and his challenge to those accounts was not accepted and nor was his explanation in relation to why the accounts were in error accepted by the AAT.
The same issue as to the disposal of property and a failure to explain why nothing is received was before the Court and it was the identical issue dealt with by the AAT and should not be re-litigated. The AAT reviewed the two objections.
It was submitted by way of reply that in the circumstances there has not been any or any adequate opportunity for the Trustee to even consider what is now sought to be raised by the Applicant and to then consider whether or not the objection of the Trustee should be the subject of a decision to withdraw. To that extent the Application is premature and as I understood the submissions the Trustee should be given the opportunity to properly consider those facts which might be regarded as new material before further considering yet another request by the Applicant to withdraw the notice of objection. Reliance was placed upon correspondence from the Trustee dated 20 December 2001 to the Applicant whereby the Trustee acknowledges receipt of the request by letter dated 7 December 2001 to withdraw the objection notice of
27 November 1999 and states that the Trustee will “respond in writing to the matters raised therein, in the new year.” Apart from correspondence regarding an issue as to whether it was appropriate for a Mr Kelly who had been a delegate who made an original decision in relation to an objection being employed by the firm representing the Applicant being considered in a letter dated 13 February 2002 with the result of that the firm of accountants decided to withdraw from having involvement in the matter, no further communication was received in writing by the Trustee from the Bankrupt or his advisers until service of the application with supporting affidavits. In those circumstances it is submitted on behalf of the Respondent that whilst a potential conflict of interest has been resolved and without the provision of further information being made available for the Trustee to consider, the Court proceedings commenced. There is not even an omission to make a decision in the present case according to the Respondent’s submissions. On the material available, which did not appear to include any further new ground for review beyond those grounds already considered by the AAT and the Inspector General, there is nothing further that the Trustee could reasonably have done in all the circumstances. In the absence of anything fresh or new since the matter was dealt with by the AAT which had concluded that it was not satisfied with the explanation given by the Applicant, it was submitted that it is inappropriate for this Court to now consider review of that decision pursuant to s.178 of the Bankruptcy Act or indeed any other provisions of that Act.
In considering whether to make an order for summary dismissal, it was submitted that the Court should have little difficulty in dealing with any decision by the Trustee to issue a notice of objection because that matter has been adequately dealt with appropriately by the Inspection General and the AAT. Any conclusion regarding withdrawal of the objection has yet to be reached by the Trustee and hence the current application it was submitted was premature as no decision has been made in circumstances where there is no new evidence or material upon which the Trustee could make a decision to withdraw. It is not sufficient to simply allow time to pass and then for the passage of time to create a situation where a decision is made of a kind which would be subject to review by the Court. As I understand the submissions by Counsel for the Applicant who instead submits that the Applicant still has to show that there is a decision and there is some ground to attack it. The Applicant needs to show that there is some basis upon which a successful attack can be made upon the decision of the Respondent in the correspondence. In the absence of new material provided by the Applicant it is premature for this Court to interfere in the conduct of the matter by the Trustee.
Reasoning
In my view a decision by a Court to summarily dismiss an application on the basis that no reasonable cause of action is disclosed or the proceeding is frivolous or vexatious or an abuse or process of the Court is a significant step to take and should be given proper and careful consideration. Ultimately a decision to dismiss an application in those circumstances deprives an Applicant of a full hearing of the case on its merits and accordingly is a power of the Court which should be exercised sparingly and in exceptional cases.
It is helpful to refer to the often cited passage from the High Court Decision in Dey v Victorian Railways Commissioners to which both Counsel have referred where the Court at page 91 states:
“The application is really made to the inherent jurisdiction of the court to stop the abuse of its process when it is employed for groundless claims. The principles upon which that jurisdiction is exercisable are well settled. A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as vexatious or frivolous and an abuse of process.
In Burton v Shire of Bairnsdale (9), O’Connor J. said: ‘Prima facie every litigant has a right to have matters of law as well as of fact deciding according to the ordinary rules of procedure, which give him full time and opportunity for the presentation of his case to the ordinary tribunals and the inherent jurisdiction of the court to protect its process from abuse by depriving a litigant of these rights and summarily disposing of an action as frivolous and vexatious will never be exercised unless the plaintiff’s claim is so obviously untenable that it cannot possibly succeed.’ Higgins J. made some observations which may be applied to the present case. ‘ It is my opinion’ he said ‘that the Full Court were led, by a very natural process I admit, to take a wrong attitude. They dealt with the matter as if they were deciding it on the merits whereas they had merely to decide whether there was anything in fact or in law that was fairly triable or arguable.’ Then his Honour said, ‘It is surely absurd to argue for days as to a plaintiff’s case being arguable.’ ‘It cannot be doubted,’ said Lord Herschell in Lawrance v Norreys (1), ‘that the court has an inherent jurisdiction to dismiss an action which is an abuse of the process of the court. It is a jurisdiction which ought to be very sparingly exercised and only in very exceptional cases.’
….
It is in my opinion of more importance to maintain the integrity of the principle that under cover of the inherent jurisdiction to stop abuse of process litigants are not to be deprived of the right to submit real and genuine controversies to the determination of the courts by the due procedure appropriate for the purpose than for this Court to add another to the many judicial attempts that have been made to construe and apply the perplexing provisions that stand in Victoria as s.5(2)(b) of the Workers’ Compensation Act 1928.”
Whilst it is true that in the present case the substantive application as amended seeks to rely upon ss.27 and 30 of the Bankruptcy Act, in addition to ss.178 and 179 of that Act I accept that the reality of the application remains one for review by this Court pursuant to its powers under s.178. Whilst s.27 provides that the Federal Magistrates Court has concurrent jurisdiction with the Federal Court and s.30 provides general powers of the Court in Bankruptcy it is clear in my view that where there is a discreet and identifiable power such as that set out in s.178 that reliance upon ss.27 and 30 do not advance the issue in the present case any further and it is not for the Court to embark upon a general enquiry in relation to conduct of a Trustee by exercising its inherent powers under ss.27 and 30 and conduct a wide ranging enquiry. In my view the appeal to the Court against a Trustee’s decision which is found in s.178 provides adequate opportunity for aggrieved parties, that is a bankrupt, a creditor or any other person affected by the act, omission or decision of the Trustee to apply to the Court which in turn makes such order in the matter as it thinks just and equitable. I accept for the present purposes that s.178 provides a general power of review of a decision of the Trustee including refusal to withdraw an objection to discharge (see McGoldrick v Official Trustee in Bankruptcy at p 552).
I further accept however that the exercise of the power under s.178 is the exercise of judicial power and cannot be compared to the administrative review power of the Administrative Appeals Tribunal in reviewing a Trustee’s decision.
The power of the Court pursuant to s.179 is clearly different to that power given to the Court under s.178. For the Court to interfere with a decision of the Trustee under s.179 it needs to consider the conduct by the Trustee in relation to a bankruptcy (see Wilson v Commonwealth of Australia [1999] FCA 219 at pp 11-14 (Branson J)).
It is clear that in considering an application of this kind that the submissions made on behalf of the Respondent are correct to the extent that an attempt to re-litigate can constitute an abuse of process.
In the present case I am satisfied that the Applicant has had adequate opportunity to seek review of the Inspector General’s decision before the AAT. The AAT has considered all relevant material and indeed included in that material had been the findings of the Federal Court by Heerey J to which I have referred in detail.
In my view the submissions made in this application by the Respondent are both clear and correct. A proper review of the AAT’s reasons for decision and consideration of the issues indicates that the matters now sought to be agitated have already been agitated. It is not sufficient for an Applicant to simply suggest that the matter could have been conducted in a better way before the AAT with perhaps a different outcome. An application pursuant to s.178 and/or s.179 of the Bankruptcy Act should not be used effectively as a further source of appeal from an AAT decision which is otherwise confined to an error of law. To do so would be to expand the operation of s.178 and to provide what might otherwise be regarded as an alternative merit review process inviting the Court to stand in the shoes of the Trustee in decisions which already are clearly subject to further review via the Inspector General and ultimately the AAT.
In the present case whilst there has been a suggestion that there is further material to be provided to the Trustee I am satisfied that there is insufficient detail in relation to that material to enable the Trustee to make a proper assessment and/or reach a decision as to whether or not to withdraw the relevant objection. Until such information is made available to the Trustee then it is premature for the Applicant to commence proceedings in this Court and inappropriate for this Court to exercise its powers in relation to the Trustee’s conduct or what otherwise might be regarded as an omission to make a decision to withdraw the relevant objection. The application in my view may properly be characterised as premature and on the material before me for the reasons advanced for and on behalf of the Respondent I am satisfied that effectively it is pursued by way of an attempt to re-litigate issues which have already been properly dealt with by the AAT. The Trustee in the circumstances is entitled to rely upon that review process particularly where there has been no appeal lodged from the AAT decision and where there appears to be a paucity of any further substantive material provided by the Applicant.
I am satisfied that in the present case the Applicant has not adduced any material which would establish that there is an act, omission or decision of a kind which would attract the attention of s.178 of the Bankruptcy Act or conduct of the Trustee pursuant to s.179 which likewise would attract the attention of this Court.
To the extent therefore that the Court needs to consider carefully its powers on summary dismissal, whilst I am prepared to accept that s.178 of the Bankruptcy Act may apply where a decision has been made to object to a bankrupt’s discharge (see McGoldrick v Official Trustee in Bankruptcy), it is in my view not appropriate to do so where there is insufficient evidence which can be referred to by the Applicant which has been the subject of either an incorrect decision or where it could be said the Trustee has failed to consider in the discharge of his duties.
The mere opportunity to review a decision to refuse to withdraw an objection and/or indeed to omit to make a decision does not mean therefore that automatically the Court should conclude that there is an arguable case. The Court is still entitled to examine the cause of action alleged in order to determine whether the proceeding amounts to an abuse of process or is vexatious (see Dey v Victorian Railways Commissioners at p 91). In the present case I am satisfied that the application as amended by the Applicant does not disclose a real question to be determined but instead on the material before me appears to be no more than an attempt to re-litigate the issues already dealt with as indicated earlier in this judgment. The claim in my view is clearly untenable. It is not sufficient in order to establish a question to be determined or an arguable case to simply suggest that there may be other material available which should be considered. If there is other material available it should be presented in clear form and not simply be material which importantly for the present case has failed to satisfy the AAT and/or in part been the subject of the strong comments by the Federal Court to which I referred to earlier. To suggest that the Applicant may have made “a complete mess of presenting his case before the AAT” and/or even that “the proper material and proper submissions were not put” is insufficient. Precise details have to be provided of material which it is said could be and should be properly examined by the Trustee.
I am further satisfied in the present case that in the absence of that material it is difficult to contemplate the Court interfering with the conduct of the trustee and/or the decision not to withdraw the relevant objection.
The Trustee, in making an assessment of the issues said to be relied upon by the Applicant is entitled to have regard to the decision and findings of the AAT particularly in relation to the amount said to be the indebtedness to Susan Bendel. That issue was obviously agitated in great detail before the AAT. In any event if there is new material which was not provided to the AAT and which the Applicant seeks to rely upon then the Trustee should at the very least be given adequate opportunity to consider the material now sought to be raised without the Court intervening at an early stage to deprive the Trustee of the opportunity to properly assess the material. Having regard to the powers of this Court under the Bankruptcy Act to which I have referred I accept in the present case that it is appropriate to make orders of a kind sought by the Respondent for the reasons given. I am satisfied that there is no reasonable cause of action disclosed and I am further satisfied that the attempt to re-litigate the issues constitutes an abuse of process of the Court. To now set aside the relevant notice or require that it be withdrawn by the Respondent with associated declarations cannot be sustained and nor for the reasons I have given can it be said that there is any real question to be determined. The issue as indicated of setting aside the objection has been adequately and thoroughly dealt with by the AAT whose decision has not been the subject of an appeal. Allowing this application to continue would in my view have the potential of allowing re-litigation and detract of principles of the finality of judicial determination and public confidence in the administration of justice (see State Bank of New South Wales Ltd v Stenhouse Ltd and ors [1997] Aust Torts Reports 81-423 at p 64,089).
Accordingly for the reasons stated the appropriate order of the Court will be as follows:
(1)The Amended Application filed 4 April 2002 be dismissed.
(2)The Applicant shall pay the Respondent’s costs including any reserved costs in accordance with the Federal Court Scale and in default of agreement to be taxed pursuant to Order 62 of the Federal Court Rules.
I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 7 March 2003
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