Boensch and Inspector-General in Bankruptcy
[2007] AATA 1075
•9 February 2007
Administrative Appeals Tribunal
WRITTEN REASONS FOR ORAL DECISION [2007] AATA 1075
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2006/773
| GENERAL ADMINISTRATIVE DIVISION | ) | ||
| Re | FRANZ BOENSCH | ||
Applicant
| And | INSPECTOR-GENERAL IN BANKRUPTCY |
Respondent
DECISION
| Tribunal | Senior Member, Mrs Josephine Kelly |
Date of hearing: 8 February 2007
Date of Oral Decision 9 February 2007
Date of Written Reasons 21 February 2007
PlaceSydney
| Decision | The Tribunal sets aside the reviewable decision made by the Respondent on 29 May 2006 and substitutes therefor a decision to cancel the objection to discharge dated 2 February 2006. [sgd] Senior Member, Mrs Josephine Kelly |
WRITTEN REASONS
At the conclusion of the hearing of this matter in Sydney, the terms of the decision made and the reasons for that decision were stated orally. The Respondent requested the Tribunal to furnish a statement in writing of the reasons for its decision pursuant to sub-section 43(2A) of the Administrative Appeals Tribunal Act 1975.
The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service, and edited only to the extent necessary to ensure clarity of expression, without in any way changing the reasons. The edited transcript comprises the reasons for the Tribunal’s decision and is annexed, and is furnished to the Applicant and to the Respondent.
WRITTEN REASONS FOR ORAL DECISION
CATCHWORDS
BANKRUPTCY – date of discharge – objection to discharge lodged by Trustee – whether objection pursuant to special ground – whether sufficient evidence to support special ground – held there was insufficient evidence to support the ground or grounds of objection.
LEGISLATION
Sections 149C, 149D, 149N Bankruptcy Act 1966
Regulation 7.01A Bankruptcy Regulation
| Senior Member, Mrs Josephine Kelly |
Mr Franz Boensch seeks the review of a decision of a delegate of the Inspector-General in Bankruptcy (“the Respondent”), to confirm the objection to the discharge of his bankruptcy lodged by his Trustee on 2 February 2006 (“the objection”). For the reasons which follow, I set aside the reviewable decision made by the Respondent on 29 May 2006 and substitute therefore a decision to cancel the objection. I note that I am confined to exercise the power the Respondent had as set out in section 149N of the Bankruptcy Act 1966 (Commonwealth) (“the Act”).
Background
On 23 August 2005 Mr Boensch became a bankrupt. He filed his Statement of Affairs on 28 September 2005. On 22 November 2005 the Trustee wrote to Mr Boensch enclosing a Statement of Income (“SOI”) form asking for its completion and return by 13 December 2005. It was agreed that is not a form prescribed for the purposes of the Act or the Regulations.
The Issue
There was no dispute that the objection complied with a requirement of section 149C of the Act. The issue in this case arises in relation to the adequacy of Mr Boensch’s response on 15 December 2005 to the Trustee’s letter of 22 November 2005.
The grounds of objection which may be taken are set out in section 149D(1) of the Act. In this case the ground of objection was pursuant to section 149D(1)(d), that Mr Boensch, when requested in writing by the Trustee to provide written information about property, income or expected income, failed to comply with the request. This is a special ground within the meaning of section 149N(1A) of the Act.
The question for me to determine was whether I must cancel the objection because section 149N(1)(b) or (c) applies or whether, as the Respondent argued, I must not cancel it because section 149N(1A) is applicable. Following the evidence of Mr Boensch by affidavit and orally - which I accept and which I do not understand the Respondent to challenge - there was no dispute that the content of his response on 15 December 2005 was the only matter for me to consider. Both parties agree that I could not take into account subsequent conduct of Mr Boensch as set out in section 149N(1B), although I note the provision refers only to the application of subsection (1A). No point was taken about which particular version I took into account; that is the one that he emailed which was unsigned and unwitnessed, (T6), or the one he posted which was signed but not witnessed, (T5).
Going to the response of Mr Boensch on 15 December, I did not understand the Respondent to dispute that the Trustee was only concerned with the current contribution assessment period, or CAP, and that is relevant because when you come to the SOI, T5, it says “Income contribution assessment period (“CAP”) 23/08/2005 to 22/08/2006”. Then it says: “(1) Estimated income for current CAP” and Mr Boensch has written “$20,000”; “(2) Actual income for the previous CAP,” and Mr Boensch has written, “$6,000”.
It was not in dispute that the only CAP in which the Trustee was interested was the current CAP which was actually the first one for this bankrupt because he only went bankrupt on 23 August 2005.
The third category on the form is Trade or Profession - Mr Boensch has written “mechanic/motor”. Under number (3) there is then a table with headings “Source of Income” and Mr Boensch has written “mechanic”; “Period of Employment” and Mr Boensch has written “September 2005 to current”. I note that “August” was written but crossed out. Then ”Gross wages received”, “Nil.” It goes on to require under that table:
You must attach a copy of the following:-
(1) Group Certificates;
(2) Your 4 most recent pay slips;
(3) Your income tax return and Notice of Assessment;
(4) If on government benefits, copies of bank statements evidencing receipt of payment.
Going to the Respondent’s submissions, the principal submission is that in relation to section 149N(1A)(b) the Applicant failed to respond to the Trustee’s letter of 22 November in any satisfactory way in the response of 15 December 2005, because the reply did not attach relevant documents that were requested. If, as the Applicant says, he had no such documents, any reading of the form sent to the Applicant required him to say so and explain. In relation to that submission, regulation 7.01A of the Bankruptcy Regulation is relied upon. That Regulation states:
For paragraph 149D (1) (d) of the Act, a bankrupt is taken to have failed to comply with a request to provide information if the bankrupt has provided information that is incomplete or inaccurate.
With respect to the Respondent’s submission, I find that that regulation is not in issue in these proceedings because there was no inaccurate or incomplete information provided. Mr Boensch provided the information that was requested. The problem in this case, in my opinion, is that the form was incomplete in the sense that if an explanation was required if none of the documents was available to be provided, then that request for an explanation should have been made. As Mr Heath submitted for the Applicant, the case for the Respondent assumes that there are documents and where there are no documents, the form simply does not cover that situation.
I note also the Respondent’s submission in relation to changes in the bankruptcy law which came into effect on 5 May 2005 and in particular its reference to the Explanatory Memorandum to the Bill and the various provisions set out from number 45 through to 54. In particular, I refer to number 52 and 53 which say:
Proposed new subsection 149N(1A) identifies the special ground paragraphs. As noted, they relate to deliberate actions which can disrupt a trustee’s administration or which are intended to defeat creditors. While it can be difficult to infer intention, in each instance the burden of proof which the trustee will bear if an objection is challenged is the civil onus, ie, proof on the balance of probabilities.
Further, by proposed subsection 149N(1B), a reviewer will not be able to cancel an objection by taking into account any conduct of the bankrupt after the time when the ground first commenced to exist. Objections on special grounds will be reviewable only as to whether the ground(s) and evidence are made out, unless the reviewer is satisfied by the bankrupt that the facts supporting the objection arose without any fault on the bankrupt’s part.
In my opinion, coming back to the particular provisions, dealing with section 149N(1)(b), in my view there is insufficient evidence to support the existence of the ground or grounds of objection; that is, I find that the form did not require Mr Boensch to provide documents that did not exist. Also, the reasons given for objecting on the ground or those grounds do not justify the making of the objection (s 149N(1)(c)). I think in this case, although unnecessary to decide, I find that that is also the case here. I note that the Inspector-General must cancel the objection. There is no discretion.
Having said that, I think what I have said deals with 149N(1A). I accept that the objection specifies at least one special ground, as already said, however, (b) and (c) are not satisfied and therefore I am not required not to cancel the objection on that basis.
For reasons that I have given, I repeat the order that I made at the outset, that I set aside the reviewable decision and cancel the objection.
I certify that the 14 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member,
Mrs Josephine Kelly
Signed: Ms Preethi Nimmagadda
Associate
Date of Hearing 8 February 2007
Date of Oral Decision 9 February 2007
Date of Written Reasons 21 February 2007
Solicitor for Applicant Wright Pavuk Lawyers
Counsel for Applicant Mr Michael HeathSolicitor for the Respondent Australian Government Solicitor
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