Combe v Inspector-General in Bankruptcy - [2005] FCA 1101

FEDERAL COURT OF AUSTRALIA
Combe v Inspector General in Bankruptcy [2005] FCA 1101
BANKRUPTCY – Decision by trustee not to withdraw notice of opposition to discharge from bankruptcy – appeal from the Administrative Appeals Tribunal – special ground under s 149D Bankruptcy Act 1996 (Cth) – no reasonable excuse – ‘questions of law’ – applies principles in Birdseye v Australian Securities and Investments Commission (2003) FCAFC 232; 76 ALD 321– whether the entitlement to legal representation under s 81(7) Bankruptcy Act 1996 (Cth) applies to Pt VII, Div 2B, Div 2C Bankruptcy Act 1996 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth) s 44
Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5, 10
Bankruptcy Act 1966 (Cth) ss 77, 81(7), 149, 149A, 149B, 149D, 149K, 149J, 149N, 153A, 153B, 178
Federal Court Rules Order 53
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 referred to
Australian Telecommunications Corporations v Lambroglou (1990) 12 AAR 515 applied
Birdseye v Australian Securities and Investments Commission (2003) FCAFC 232; 76 ALD 321 applied
Combe v Pascoe (2004) FCA 725 referred to
Duncan v Fayle (2004) 138 FCR 510 applied
Peczalski v Comcare (1999) FCA 366; 85 ALD 697 referred to
Saxby Bridge Financial Planning Pty Ltd (2003) 133 FCR 290 referred to
Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483 referred to
TNT Skypack International (Aust) Pty Ltd v Federal Commissioner of Taxation (1998) 82 ALR 175 applied
FAYE DIANE COMBE v INSPECTOR GENERAL IN BANKRUPTCY
NSD65 OF 2005
BENNETT J
11 AUGUST 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD65 OF 2005

BETWEEN:

FAYE DIANE COMBE
APPLICANT

AND:

INSPECTOR GENERAL IN BANKRUPTCY
RESPONDENT

JUDGE:

BENNETT J

DATE OF ORDER:

11 AUGUST 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The applicant pay the respondent’s costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD65 OF 2005

BETWEEN:

FAYE DIANE COMBE
APPLICANT

AND:

INSPECTOR GENERAL IN BANKRUPTCY
RESPONDENT

JUDGE:

BENNETT J

DATE:

11 AUGUST 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT

This is an appeal from a decision of the Administrative Appeals Tribunal (‘the Tribunal’) of 13 December 2004 affirming the decision of the respondent (‘the Inspector-General’) to confirm a notice of objection to the discharge from bankruptcy of the applicant (‘Ms Combe’). The appeal is brought under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’), which provides for an appeal on a question of law from a decision of the Tribunal.
Factual Background
Ms Combe was made bankrupt on a sequestration order issued under the Bankruptcy Act 1966 (Cth) (‘the Act’) on 15 October 2002. Mr Scott Pascoe, a registered trustee in bankruptcy (‘the trustee’), was appointed the trustee of the bankrupt estate.
In the normal course, Ms Combe would be discharged from bankruptcy on 14 November 2005. However, in October 2003, the trustee filed three…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] FCA 1101
Decision Date: 11 AUGUST 2005

CaseChat Overview and Summary

Combe, an appellant, sought to appeal against the decision of the Inspector-General in Bankruptcy, affirmed by the Administrative Appeals Tribunal (AAT), to confirm a notice of objection to her discharge from bankruptcy. The appeal was brought under section 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth). The appellant, who had been made bankrupt on 15 October 2002, was object to being discharged from bankruptcy until 14 November 2010 due to objections filed by the trustee in bankruptcy. The trustee objected to her discharge on the basis that she failed to provide information about her property as required under section 149D(1)(d) of the Bankruptcy Act 1966 (Cth). The appellant applied to the Inspector-General for a review of the trustee’s decision but the Inspector-General confirmed the notice of objection. The appellant then appealed to the AAT, which affirmed the Inspector-General’s decision.

The appeal raised questions of whether there was a denial of procedural fairness and whether the Tribunal took into consideration certain statutory provisions. The court found that the appellant's contention that there was a denial of procedural fairness was not made out, as the Tribunal had properly considered the issue of whether there was evidence to support a special ground within the meaning of section 149N(1A) and whether the appellant had a reasonable excuse for failure to comply. The court also found that the appellant had raised numerous factual issues and contentions that had not previously been raised and which had no proved factual basis. The appeal was dismissed with costs.

The court concluded that the appeal was not properly founded in law as the Tribunal had correctly applied the relevant statutory provisions. The appeal was dismissed, and the appellant was ordered to pay the respondent’s costs.

Orders

Orders of the court

1. The appeal be dismissed.

2. The applicant pay the respondent’s costs.

Background

Background to the litigation

This is an appeal from a decision of the Administrative Appeals Tribunal (‘the Tribunal’) of 13 December 2004 affirming the decision of the respondent (‘the Inspector-General’) to confirm a notice of objection to the discharge from bankruptcy of the applicant (‘Ms Combe’). The appeal is brought under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’), which provides for an appeal on a question of law from a decision of the Tribunal. Factual Background Ms Combe was made bankrupt on a sequestration order issued under the Bankruptcy Act 1966 (Cth) (‘the Act’) on 15 October 2002. Mr Scott Pascoe, a registered trustee in bankruptcy (‘the trustee’), was appointed the trustee of the bankrupt estate. In the normal course, Ms Combe would be discharged from bankruptcy on 14 November 2005. However, in October 2003, the trustee filed three objections to discharge. The effect of such notice of objection is to extend the period of bankruptcy, in this case to 14 November 2010. One of these objections (‘the notice’) was filed on 23 October 2003. The grounds in the notice were that Ms Combe failed to provide information to the trustee pursuant to s 149D(1)(d) of the Act. The trustee contended that, when requested in writing by him to provide written information about her property, Ms Combe failed to comply with the request. On 9 December 2003, Ms Combe applied to the Inspector-General pursuant to s 149K(1)(b) of the Act for a review of the trustee’s decision to file the three notices of objection. The Inspector-General confirmed the notice and cancelled the two other objections, which are not now relevant. On 22 March 2004 Ms Combe applied to the Tribunal under s 149Q(b) of the Act to review the Inspector-General’s decision in respect of the notice. On 13 December 2004 the Tribunal affirmed the Inspector-General’s decision.The relevant legislative scheme Section 149 of the Act provides that the bankrupt is, by force of that section, discharged from bankruptcy at the end of a period of three years from the date on which the bankrupt filed his or her statement of affairs. Section 149 is read subject to the filing of an objection to discharge by the trustee pursuant to s 149B. Section 149B provides that a trustee must file a notice of objection if the trustee believes that doing so will help make the bankrupt discharge a duty and that there is no other way for the trustee to induce the bankrupt to do so. A bankrupt’s duties are listed under s 77 of the Act. Relevantly, these include:‘(1)A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause:…(ba)give such information about any of the bankrupt’s conduct and examinable affairs as the trustee requires; and…(g) aid to the utmost of his or her power in the administration of his or her estate.’ Section 149A(1) provides that a bankruptcy will be extended when an objection to discharge is filed by the trustee, ‘unless the objection is withdrawn or cancelled’.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

BENNETT J (dissent)

Ms Combe’s contention that there was a denial of procedural fairness was not made out.Conclusion The Tribunal was dealing with a straightforward issue, whether there was evidence to support a special ground within the meaning of s 149N(1A) and whether Ms Combe had a reasonable excuse for failure to comply. It dealt with that issue. That was the issue before the Tribunal and the subject of this appeal. Ms Combe has, in this appeal from the Tribunal’s decision, raised numerous factual issues and contentions that have not previously been raised and which have no proved factual basis. It is difficult for a litigant in person to present an appeal such as this and allowances can be made for lack of knowledge of procedural matters. However, the case must still be considered properly according to law, which includes consideration of an application of the relevant statutory provisions. No error of law has been established. The appeal is dismissed with costs.

Ratio Decidendi

Legal Principle Established

Established by:

Mr Murray, who appears for the Inspector-General, contends that Question 6 is not a question of law. Certainly, it contains a number of unproved factual assumptions. Ms Combe possibly intended to call into question whether the Tribunal failed to comply with an obligation to give proper consideration to the evidence and other material before it. So understood, the question is not stated in a way which complies with the requirements of O 53 r 3(2) of the Federal Court Rules. Further, the factual basis in the question, extending to the alleged failure on the part of the Tribunal, was not raised before the Tribunal or, indeed, before me. To the extent that it seeks to raise some issue of procedural unfairness, none is established.Question 7: Whether the Tribunal took into consideration s 30(5)(b) of the Bankruptcy Act 1966 ‘by failing to inform the Inspector-General in Bankruptcy of Conti J’s directions in transcript before the Federal Court of Australia on 3 June 2004, cease to object to the discharge of bankruptcy before the Administrative Appeals Tribunal’. Question 7 does not raise a question of law. The decision of Conti J in Combe v Pascoe (2004) FCA 725 is irrelevant for the purposes of this application even though Ms Combe was a party to those proceedings. In her submissions at [17] Ms Combe asserts that his Honour directed that the ‘trustee discontinue his objection to discharge the bankruptcy’ and that, by not acting on his Honour’s directions, the trustee breached the Act and also the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ‘ADJR Act’). On 22 December 2003, Ms Combe had filed a notice of appeal against the judgment of Raphael FM given on 2 December 2003, whereby his Honour ordered Ms Combe, upon the application of the trustee, to vacate a property comprising an asset of her bankrupt estate. On 12 February 2004 Conti J refused an application for a stay of the order to vacate the property. On 3 June 2004 his Honour dismissed the remaining grounds of Ms Combe’s appeal, concerning an ongoing dispute with her creditor, Mr Ziade. Conti J did not direct the trustee to discontinue his objection to discharge the bankruptcy. The trustee’s objection to discharge the bankruptcy was not an issue before his Honour. At [11] Conti J says:‘…the interests of justice clearly require the completion of the winding up of the bankrupt estate of Ms Combe takes place without further delay, so that she can pursue her complaints and claims against Mr Ziade without the intervention of her trustee in bankruptcy.’ His Honour’s comments may indicate a preference for expediency but they do not require the trustee to abstain in future from objecting to the discharge of bankruptcy, nor did his Honour have the power to make such an order. Question 8: Whether in terms of the Administrative Decisions (Judicial Review) Act 1977 section 6(1)(e) the making of the decision of the bankrupt’s trustee to extend the period of Bankruptcy as affirmed by the Tribunal was an improper exercise of power conferred by the enactment in pursuance of which the decision purported to have been made namely s 149J and s 178 of the Bankruptcy Act 1966.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD65 OF 2005

BETWEEN:	FAYE DIANE COMBE APPLICANT
AND:	INSPECTOR GENERAL IN BANKRUPTCY RESPONDENT
JUDGE:	BENNETT J
DATE OF ORDER:	11 AUGUST 2005
WHERE MADE:	SYDNEY

JUDGE:	BENNETT J
DATE:	11 AUGUST 2005
PLACE:	SYDNEY