DENNIS JOHN GRANT and INSPECTOR-GENERAL IN BANKRUPTCY - [2009] AATA 605

Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 605
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/4956 & 4958

GENERAL ADMINISTRATIVE DIVISION )

Re DENNIS JOHN GRANT

Applicant

And

INSPECTOR-GENERAL IN BANKRUPTCY

Respondent

DECISION

Tribunal Deputy President P E Hack SC
Date17 August 2009
PlaceBrisbane

Decision A. In application 2008/4956 the Tribunal sets aside the decision of the respondent and substitutes a decision that in each of the years ending 13 January 2006, 13 January 2007 and 13 January 2008 the contribution that the applicant is liable to make is assessed as nil.
B. In application 2008/4958 the Tribunal sets aside the decision of the respondent and substitutes a decision that the objection be cancelled.

..............Signed..................
Deputy President

CATCHWORDS
BANKRUPTCY – contributions to estate – Inspector-General’s review of assessments – no evidence of income relied upon by trustee – assessments reduced to nil.
BANKRUPTCY – objection to discharge – bankrupt engaged in misleading conduct by obtaining credit without disclosing the bankruptcy - whether the reasons given by the trustee justified making the objection – whether adequacy of the reasons open to be scrutinised by the Tribunal – decision set aside and a decision to cancel the objection substituted.
Bankruptcy Act 1966 (Cth) ss 139ZA(1)(b), 139ZD, 139ZF, 148, 149B, 149C(1), 149C(1A), 149D(1), 1149K, 149N, 149Q
Bankruptcy Legislation Amendment Act 2002 (Cth) Explanatory Memorandum
Inspector-General v Nelson (1998) 86 FCR 67
Macchia v Nilant [2001] FCA 7; 110 FCR 101
REASONS FOR DECISION

17 August 2009 Deputy President P E Hack SC

Introduction

There are two applications before the Tribunal, made by Dennis John Grant, in which Mr Grant seeks review of decisions made by the respondent, the Inspector-General in Bankruptcy.
The first decision, which is the subject matter of application 2008/4956, concerns the Inspector-General’s review of assessments, made by Mr Grant’s trustee in bankruptcy, of contributions required to be made by him to his estate pursuant of Div 4B of Part VI of the Bankruptcy Act 1966 (Cth). The other decision, the subject matter of application 2008/4958, concerns the Inspector-General’s review of the trustee’s objection to Mr Grant’s discharge from bankruptcy.
Background
Mr Grant became bankrupt on 14 January 2005 when the Official Receiver accepted his petition. The Official Trustee became his trustee in bankruptcy by virtue of s 160 of the Bankruptcy Act. At that time his spouse, Mrs Terry Grant, was the registered proprietor of a home unit at Benowa on the Gold Coast. In February 2005 Mrs Grant obtained approval from a financier to borrow $400,000 to enable her to purchase real property in East Brunswick, Victoria. The purchase was settled, and the loan drawn down, in early April 2005. Mr Grant had no interest in the real property and was not a party to the loan.
By early 2007 Mrs Grant was looking to refinance this loan at a better interest rate. She was a personal customer at the Benowa branch of the Bank of Queensland. In addition she had an interest in a company, CT Grant Pty Ltd, which operated a lighting import business in partnership with Momberg Investments Pty Ltd under the style and title of “ND Light”. The partnership deed entitled CT Grant Pty Ltd to be paid the first $100,000 of profit.
The manager and owner of the Benowa branch was a Mr John Shillington. In the period leading up to October 2007 Mr Shillington suggested to Mr and Mrs Grant that Mrs Grant’s loan be transferred to the Bank of Queensland. That suggestion was agreed to. In the result a “Consumer Lending Application” was prepared. I infer that Mr Shillington prepared it from information provided, at least in part, by Mr or Mrs Grant. It describes Mrs Grant as the primary applicant and correctly records her occupation, her employer and her monthly earnings. Mr Grant is recorded as “Applicant 2”. His occupation is shown as “Accountants” and he is described as being employed by CT Grant Pty Ltd. Confusingly, the document immediately thereafter describes him as “Self Employed (Full Time)”. A “before tax” monthly income of $6,806.00 was attributed to Mr Grant in the document.
Mr Grant says that he did not provide this information to Mr Shillington and that the recorded details were incorrect. He was not, and never had been, an accountant. He was not employed by CT Grant Pty Ltd, in fact at that time he was unemployed although from time to time he helped out at the partnership business. He was not then in receipt of the income attributed to him. He was, he said, in receipt at that time of only a very modest income which he disclosed fully to the Official Trustee.
It is material to note that Mr Grant says as well that he did not see this application at the time and was never called upon to execute it. There is provision in the document for it to be executed by the applicant/s for a loan but seemingly no executed copy of the document is able to be produced. On the material before me the only document that Mr Grant executed was a document described as “Variable Home Loan Privileges Package Home Loan Schedule”. That was executed by Mr and Mrs Grant in the presence of Mr Shillington on 23 October 2007. By virtue of that document Mr Grant became a joint borrower with Mrs Grant. The loan was secured by a mortgage granted by Mrs Grant over the real property owned by her.
Mr Grant says that prior to being asked to execute this document he was unaware that he was to be a borrower. He had had some dealings with Mr Shillington by e-mail but had not otherwise made any application to borrow. When presented with the document and asked to sign he was told by Mr Shillington that he was signing as “guarantor”. There is some support to be found for that in the bank’s internal notations that refer to the ”Guarantor’s income”.
Mr Grant accepts that he did not inform Mr Shillington, or any other employee of the Bank of Queensland, of the fact of his earlier bankruptcy although there is no suggestion that he was ever asked.
On 14 November 2007 the Bank of Queensland loan was drawn down (in an amount in excess of $400,000) and Mrs Grant’s previous borrowing paid out.
It would seem that in December 2007 the Official Trustee forwarded correspondence to Mr Grant requesting details of his employment history. Mr Grant did not provide those details. It is not clear why, although there is a suggestion in the material that he did not receive the correspondence. In any event the upshot was that on 9 January 2008, some five days before Mr Grant would have been otherwise discharged from his bankruptcy, the Official Trustee filed a notice of objection to his discharge from bankruptcy on the basis that Mr Grant had failed to provide information about his property and income.
Subsequently the Official Trustee learned that Mr Grant had a joint loan account and a credit card with the Bank of Queensland. That prompted the Official Trustee to file a further notice of objection to discharge on 15 May 2008. The basis of the second notice of objection was that Mr Grant had obtained credit in excess of the prescribed amount without disclosing the fact of his bankruptcy. On 19 May 2008 the first notice of objection to discharge was withdrawn by the Official Trustee.
The Bank of Queensland supplied to the Official Trustee the Consumer Lending Application that showed that Mr Grant had a gross monthly income of $6,806.00. Using that figure the Official Trustee made assessments of contribution for each of the years ending 13 January 2006, 13 January 2007 and 13 January 2008 in the amount of $15,934.50.
By letters dated 17 July 2008 and 18 July 2008 solicitors acting for Mr Grant sought a review by the Inspector-General of the decision to file the objection to discharge and the decision to make the contribution assessments.
On 15 September 2008 a delegate of the Inspector-General decided to confirm the decision to lodge the objection to discharge. On 22 September 2008 the same delegate decided to set aside the Official Trustee’s contribution decision and to make fresh assessments of liability of $10,846.00 for each of the three periods. The decision treated Mr Grant as receiving a monthly income of $6,806, the figure on the Bank of Queensland document, but made appropriate allowance for taxation to determine the altered contribution liability. It is not in issue that the assessments are mathematically correct had Mr Grant been in receipt of income of $6,806.00 per month.
The legislation – contributions
Given that the methodology of the assessments is not in issue it is not necessary to undertake a detailed examination of the provisions of Division 4B of Part VI of the Bankruptcy Act. They permit the trustee of a bankrupt’s estate to make an assessment “of the income that is likely to be derived, or was derived, by the bankrupt” during particular periods and of the contribution that the bankrupt is liable to pay in respect of that period[1]. A trustee has power under s 139Z of the Bankruptcy Act to make, in effect, a default assessment where “the trustee has reasonable grounds for believing that the bankrupt is likely to derive, or derived, income”.
[1] See s 139 W(1), Bankruptcy Act.
By virtue of s 139ZA(1)(b) of the Bankruptcy Act the Inspector-General may review a trustee’s decision to make an assessment at the request of the bankrupt “for reasons that appear … to be sufficient to justify such a review”. On the review the Inspector-General has all the powers of the trustee and may either:
“(a) confirm the decision; or
(b)set aside the decision and make a fresh assessment under subsection 139W(2).”[2]
Section 139ZF of the Bankruptcy Act provides for a review by the Tribunal of decision by the Inspector-General on such a review.
[2] See s 139ZD, Bankruptcy Act.
Reasoning – contributions
The case for the Inspector-General was based principally upon the entry in the loan application showing Mr Grant’s income as $6,806.00 per month. The solicitor for the Inspector-General submitted that I ought reject Mr Grant’s denials that he ever informed the Bank of Queensland of this amount or that he ever earned this amount (or any other like amount). Support for the conclusion that Mr Grant’s denial of receiving income in the period in question ought be rejected was sought to be gained from credit card statements which, it was said, showed that Mr Grant “travelled interstate frequently and internationally on at least two occasions.” Mr Grant, it was said, “stayed in up-market hotels and enjoyed regular restaurant meals … not the actions of a person who has no job, no business and no income.”
The Inspector-General submitted that is was inherently unlikely that Mr Shillington would have “made up” the income figure attributed to Mr Grant and invited me to infer from Mr Grant’s failure to call Mr Shillington that the evidence of Mr Shillington would not have supported Mr Grant’s case.
In the Inspector-General’s written submissions, but not in the Statement of Facts and Contentions nor, so far as I could discern, in cross-examination of Mr Grant or Mrs Grant, a case was put that the Tribunal was entitled to regard Mr Grant as having engaged in activities that resemble employment or other work thus enlivening the power under s 139Y of the Bankruptcy Act to make an assessment based upon a determination of what “reasonable remuneration” for that work would have been. The Inspector-General’s case hinted at, but never squarely put, the contention that Mr Grant’s relationship with CT Grant Pty Ltd and ND Light was an undisclosed financial relationship.
I am unable to accept the Inspector-General’s case.
I should say at the outset that I have no reason to doubt the veracity of Mr Grant’s evidence or, for that matter, that of Mrs Grant. The exchange of e-mail correspondence between Mr Grant and Mr Shillington rather suggests to me that Mr Shillington was shaping the form of the application, and varying it where necessary to obtain the necessary approval from the “Credit Assessment Manager”. I do not regard the analysis of the credit card bill as demonstrating that Mr Grant had undisclosed sources of income. His wife was employed and had an interest in a business that generated significant income.
Moreover I do not propose to draw any inference adverse to Mr Grant from his failure to call Mr Shillington. I would ordinarily be reluctant, in any event, to draw such an inference against an unrepresented litigant but beyond that I would have thought that, if anything, the Inspector-General ought to have been the party calling Mr Shillington. The Inspector-General relied upon the document to evidence the contention that Mr Grant informed Mr Shillington of an income figure. Mr Grant did not sign the document. He denied ever seeing it or adopting it in any way. It is not otherwise his document. He denied ever providing Mr Shillington with that detail. The document records incorrectly, that Mr Grant’s occupation as that of an accountant and the details for the type of employment recorded are contradictory. The Inspector-General’s case is based almost entirely upon my acceptance of this document as being an accurate guide to Mr Grant’s income. In such circumstances I would have thought that the Inspector-General ought to have been the party calling the apparent author of the document to sustain the hearsay assertion in it that Mr Grant informed Mr Shillington that Mr Grant’s monthly earnings were as shown in it.
I need not, in any event, draw any inference from the absence of Mr Shillington since I accept Mr Grant’s evidence of his income and am not dissuaded from doing so by the reference in the document to monthly income of $6,806.00.
Finally I reject as unfounded the Inspector-General’s reliance upon s 139Y of the Bankruptcy Act even were I to regard it as being open to the Inspector-General to advance such a case. It may be accepted that the material raises a suspicion that Mr Grant enjoyed a closer connection to the affairs of CT Grant Pty Ltd than had been disclosed to the Official Trustee. But the evidence falls well short of enabling me to make the detailed factual findings required by s 139Y of the Bankruptcy Act. That, no doubt, is the consequence of the matter never having been put in issue thus providing a further reason to reject the belated reliance upon s 139Y.
In these circumstances I am satisfied that Mr Grant’s income during the three contribution assessment periods was not as the Official Trustee and the Inspector-General concluded. Rather, I am satisfied that Mr Grant’s income was as he had earlier disclosed to his trustee.
There being no suggestion that that level of income would warrant the imposition of any contribution, I would then set aside the decision of the Inspector-General and substitute an assessment that for each of the three years in question the contribution that Mr Grant was liable to make is nil.
The legislation – objection to discharge
Ordinarily a bankrupt is entitled to be discharged from bankruptcy three years from the date on which the bankrupt’s statement of affairs was filed[3]. The effect of s 149A of the Bankruptcy Act is that a discharge from bankruptcy is deferred for a further period of time if a written notice of objection to discharge is filed by the trustee with the Official Receiver before that automatic discharge and entered in the National Personal Insolvency Index. The nature of the objection to discharge determines the extent by which the period of bankruptcy is extended. Where one of the grounds of objection is a ground specified in paragraph 149D(1)(ab), (ac), (ad), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma) of the Bankruptcy Act the period of bankruptcy is extended to eight years. A notice of objection on any other ground extends the period of bankruptcy to five years.
[3] See s 149, Bankruptcy Act.
The permissible grounds of objection are detailed in s 149D(1) of the Bankruptcy Act. The ground relevant to these proceedings, and one that would have the effect of extending Mr Grant’s bankruptcy by two years to 15 January 2010, is that in s 149D(1)(c) of the Bankruptcy Act, namely that,
“after the date of the bankruptcy the bankrupt engaged in misleading conduct in relation to a person in respect of an amount that, or amounts the total of which, exceed $3000.”
The figure of $3,000.00 is indexed[4] and in May 2008 was $4,555.00. Section 148(a) of the Bankruptcy Act deems a bankrupt to have engaged in misleading conduct in relation to a person in respect of a particular amount if,
“the bankrupt, either alone or jointly with any other person, obtained credit to the extent of [that] amount from the first-mentioned person without informing that person that he or she was an undischarged bankrupt.”
[4] See s 304A, Bankruptcy Act.
Section 149B of the Bankruptcy Act deals with the filing by a trustee of a notice of objection to discharge. It is in these terms:
“(1)Subject to the following provisions of this Subdivision, at any time before a bankrupt is discharged from bankruptcy under section 149, the trustee may file with the Official Receiver a written notice of objection to the discharge.
(2)The trustee of a bankrupt’s estate must file a notice of objection to the discharge if the trustee believes:
(a)that doing so will help make the bankrupt discharge a duty that the bankrupt has not discharged; and
(b)that there is no other way for the trustee to induce the bankrupt to discharge any duties that the bankrupt has not discharged.”
It is helpful to refer as well, to s 149C(1) of the Bankruptcy Act which deals with the form of a notice of objection. It requires the notice to set out the ground or grounds relied upon, being one or more of the grounds specified in s 149D(1), to refer to the evidence that the trustee relies upon to establish the ground or grounds and,
“(c)state the reasons of the trustee for objecting to the discharge on that ground or those grounds.”
However by virtue of s 149C(1A) of the Bankruptcy Act where the trustee’s notice of objection relies on one of the grounds specified in s 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k), or (ma) of the Bankruptcy Act the reasons for the objection are not required to be stated in the notice of objection.
The Inspector-General may review a decision to file an objection to discharge if requested to do so by the bankrupt for reasons that appear sufficient to justify a review[5]. The powers on a review by the Inspector-General are set out in s 149N of the Bankruptcy Act as follows:
[5] See s 149K, Bankruptcy Act.
“(1)On a review of a decision, if the Inspector‑General is satisfied   that:
(a)the ground or grounds on which the objection was made was not a ground or were not grounds specified in       subsection 149D(1); or
(b)there is insufficient evidence to support the existence of the ground or grounds of objection; or
(c)the reasons given for objecting on that ground or those grounds do not justify the making of the objection; or
(d)a previous objection that was made on that ground or those grounds, or on grounds that included that ground or those grounds, was cancelled;
the Inspector‑General must cancel the objection.
(1A)An objection must not be cancelled under subsection (1) if:
(a)the objection specifies at least one special ground; and
(b)there is sufficient evidence to support the existence of at least one special ground specified in the objection; and
(c)the bankrupt fails to establish that the bankrupt had a reasonable excuse for the conduct or failure that constituted the special ground.
For this purpose, special ground means a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma).
…
(3)If the Inspector‑General is not satisfied as mentioned in         subsection (1), the Inspector‑General must confirm the decision.”

Section 149Q allows for a review by the Tribunal of the Inspector-General’s decision on the review.
Reasoning – objection to discharge
There is no doubt that there existed a ground on which the Official Trustee might object to Mr Grant’s discharge. Despite Mr Grant’s explanation of the circumstances under which the joint loan was obtained he did, in fact, obtain credit, jointly with Mrs Grant, in excess of the prescribed amount from the Bank of Queensland after the date of the bankruptcy and without informing the Bank of Queensland of the fact that he was an undischarged bankrupt. Consequently he is taken, by s 148 of the Bankruptcy Act, to have engaged in misleading conduct in relation to the Bank of Queensland with the further consequence that the ground of objection to discharge in s 149D(1)(c) of the Bankruptcy Act, that relied upon by the Official Trustee, was made out.
Additionally, on the occasions when Mr Grant’s credit card debt exceeded $4,555.00 he also obtained credit and thus engaged in misleading conduct. There was some discussion in the course of the hearing about whether the credit card used for the transactions was that of Mr Grant or Mrs Grant and whether the credit card statements in Mrs Grant’s name ought be obtained. On reflection, it does not matter and I do not propose to take steps to have Mrs Grant’s records summonsed. The form of the account makes it plain that the liability to pay is that of Mr Grant; it is not to the point that another person may also have been liable or may have obtained the benefit of the particular transaction. It was Mr Grant who obtained credit on the credit card account in excess of the prescribed amount without disclosing the fact of his bankruptcy.
On my perusal of the credit card statements Mr Grant’s debt appears to have exceeded the prescribed amount between 14 November 2007 and 19 March 2008, between 23 April 2008 and 9 May 2008, between 3 June 2008 and 6 August 2008, and between 27 August 2008 and 17 February 2009, the closing date of the last statement in evidence before me.
The Inspector-General’s case was that once it was determined that the ground of objection was made out the Tribunal was bound to affirm the decision under review, that is, there was no room to consider, for example, the circumstances under which Mr Grant obtained credit which created the entitlement to lodge the notice of objection.
As will appear I do not agree. I accept that that is so where the ground of objection is a special ground but that is the consequence of s 149N(1A) of the Bankruptcy Act which makes special provision where the objection specifies at least one special ground. In those cases, the factual enquiry on a review under s 149N(1) of the Bankruptcy Act is limited to whether there is sufficient evidence to support the existence of at least one special ground and whether the bankrupt has established a reasonable excuse for the conduct or failure that constituted the special ground. In such cases no enquiry is required or permitted into whether the trustee gave reasons that justified the making of the objection.
But where, as here, the ground or grounds of objection are not special grounds the Inspector-General must consider whether any of the matters in paragraphs (a) to (d) of s 149N(1) of the Bankruptcy Act are satisfied. One of those matter is whether,
“the reasons given for objecting on that ground or those grounds do not justify the making of the objection.”
If the Inspector-General (or the Tribunal on review) is satisfied that the reasons given do not justify the making of the objection there is no discretion, the objection must be cancelled.
It is relevant to note that s 149B(2) of the Bankruptcy Act delineates the circumstances where the trustee must file a notice of objection to discharge. In other circumstances the trustee has a discretion to exercise and must have reasons, and be able to articulate those reasons, for objecting to the discharge. As French J (as his Honour then was) said in Macchia v Nilant[6] the trustee in these cases is required to “exercise discretionary judgment”. The written submissions of the Inspector-General[7] appear to accept the continuing force of his Honour’s observations following the 2002 amendments to the Bankruptcy Act.
[6] [2001] FCA 7; 110 FCR 101 at [55].
[7] At paragraph 82.
Those submissions also made reference to the decision of the Full Court in Inspector-General v Nelson[8] where the Court said of the policy of the Act:
“In providing that the trustee ‘may file’ a written notice of objection to discharge, s 149B (1) uses language by which discretions are commonly conferred.
The policy of the current bankruptcy legislation is that, prima facie, a bankrupt is entitled to the benefit of a discharge by operation of law. The sections dealing with objections to discharge are consistent with this policy. By requiring that a notice of objection must not only set out the ground or grounds of objection and refer to the evidentiary material relied upon in support, but also state the ‘reasons’ for objecting, s 149C makes it clear that a trustee filing such a notice must have reasons for doing so, in addition to being satisfied that the evidentiary material establishes one or more permissible grounds. By providing for review by the Inspector-General of the decision to object, s 149K makes it clear that the reasons for objecting were intended to be subject to scrutiny. Finally, by providing for review by the AAT of, inter alia, a decision to file a notice of objection and the Inspector-General's decision on review of such a decision, s 149Q again makes it clear that the reasons for the filing of a notice of objection are to be the subject of scrutiny.
There is no reason to be found in these provisions for thinking that the considerations relevant to the exercise of the discretion to file a notice of objection are any less extensive than all those conformable to the purpose and objects of the Act. In the absence of any indication of a contrary legislative intention, we would be disposed to think that in order to ‘keep a person bankrupt’ beyond the ordinary period, a trustee would need to have reasons directed to achievement of a purpose of the law of bankruptcy. In fact, although ss 149B-149D do not indicate what will be ‘sufficient reasons’, as distinct from ‘permissible grounds’, to support an objection, s 149N (1) (set out earlier) provides that on review of a trustee's decision to object the Inspector-General must cancel the objection if, inter alia, he is satisfied that the reasons given by the trustee for objecting ‘do not justify the making of the objection’. Thus, far from giving rise to a prima facie right to object, the existence of a permissible ground supported by sufficient evidence is a threshold: there must also be reasons justifying the making of the objection in the particular case.”
[8] (1998) 86 FCR 67 at 78-79 (Wilcox, Lindgren & RD Nicholson JJ).
Substantial amendments were made to the Act by the Bankruptcy Legislation Amendment Act 2002[9]. Relevantly, the stated object of the amendments was to:
“(c)strengthen the objection to discharge provision … by making it easier for trustees to lodge objections to a person’s discharge from bankruptcy and harder for bankrupts to sustain challenges to objections.”[10]
The Explanatory Memorandum said of the concept of “special grounds”:
“165The amendments propose to address this weakness in the present law by identifying some existing grounds, and adding some new grounds, as ‘special grounds’. In these special ground cases, the trustee will not need to show that filing the objection will advance the administration, only that the special ground existed. Therefore, if the grounds of objection include a special ground, only the facts supporting that special ground need to be established. The special grounds are specified in paragraphs 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) and (ma). Item 109 proposes that paragraph 149C(1)(c), which requires a trustee to state the reasons for objection to discharge, not apply regarding objections filed on special grounds.”
[9] No. 131 of 2002.
[10] Explanatory Memorandum, clause 3.
The ground of objection relied on here is not a special ground. Thus the Trustee must have a reason or reasons for wanting to extend the period of bankruptcy and, as the extract from Nelson makes plain, the purpose of s 149K of the Bankruptcy Act is to permit scrutiny of the reasons by the Inspector-General or the Tribunal. The amendments made to s 149K in 2002 were procedural only; they did not alter the substance of the section from the form it was in at the time of the Full Court’s decision in Nelson.
Accordingly I reject the Inspector-General’s argument that it is not open to me to consider the circumstances in which Mr Grant obtained credit in order to consider whether the reasons of the Official Trustee justify the making of the objection.
I should, at the outset, note the Official Trustee’s stated reasons for the objection. They are as follows:
“1.In failing to advise Bank of Queensland that he is an undischarged         bankrupt, Dennis John Grant breached his obligations under the Act.
2. Under section 19 of the Act, the trustee has a duty to take whatever action is practical to try to ensure that the bankrupt discharges all of his duties under the Act; consider offences that may have been       committed by the bankrupt; and investigate the bankrupts      employment, income and examinable affairs.
3.Subsection 149B(2) of the Act provides that if the trustee believes an objection to discharge will induce the bankrupt to discharge their obligations then the trustee must file an objection to discharge.
4.I believe this objection to discharge will induce the bankrupt to cooperate with the trustee’s investigations and discharge his          statutory obligations to provide complete and accurate information to the trustee, particularly in respect of any property or entity in which he has an interest and in respect of his income and employment. ”
As it seems to me the premise in paragraph 1 does not sustain the conclusion in paragraph 4. Paragraph 1 establishes no more than that the ground on which the objection was made was one specified in s 149D(1) of the Bankruptcy Act and, arguably, that there was sufficient evidence to support the existence of the ground of objection. Paragraphs 2 and 3 paraphrase provisions in the Act. Paragraph 4 asserts a conclusion without reciting any evidence from which that conclusion might be drawn.
The present enquiry is whether there were “reasons given” that justified the making of the objection. On the face of the notice of objection it seems to me to be inescapable that the reasons given do not provide that justification. But I accept that it is open to the Inspector-General to rely upon evidence not recited in the reasons for the original decision in order to sustain the correctness of the decision made by the Inspector-General on review.
Perhaps as a consequence of the paucity of the trustee’s reasoning, the Inspector-General’s case was not put on the basis that Mr Grant had failed or refused to cooperate with his trustee’s investigation or had not provided complete and accurate information to the trustee. In that regard it is pertinent to note that the notice of objection lodged on 9 January 2008, which asserted that that Mr Grant had failed to provide information about his property and income, was withdrawn a few days after the 15 May 2008 objection was filed. The Inspector-General’s conclusion, and the case presented, was that the reasons, set out by the Official Trustee in the notice of objection justified the making of the objection. The decision of the Inspector-General said, on this aspect of the matter,
“I am of the view that the reasons provided by the trustee and set out in the notice of objection dated 15 May 2008 justify the making of the objection.”
Again I am unable to agree.
I do not regard the circumstances in which Mr Grant obtained credit as, of themselves, warranting the filing of the objection. As I have said, there is no apparent or demonstrated connection between that matter and the conclusion in paragraph 4 of the Official Trustee’s reasons. The fact that he did so, whether on one or more occasions, does not lead to the conclusion that he had not cooperated with the trustee’s investigations or failed to discharge some statutory obligation to provide complete and accurate information to the trustee, particularly in respect of any property or entity in which he had an interest and in respect of his income and employment.
The evidence relied upon by the Official Trustee in support of the objection and the reasons for the objection are identified in the Inspector-General’s written submissions[11] as being those set out in paragraphs 23 and 24 of the Inspector-General’s Statement of Facts and Contentions in application 2008/4958. Within those paragraphs is reference to the request for information made, but not answered, in December 2007. But reference is made to information subsequently provided by Mr Grant in April 2008. I cannot discern any reference in paragraphs 23
and 24 of the Inspector-General’s Statement of Facts and Contentions, nor was it put to Mr Grant, that the information supplied was inaccurate or incomplete. I cannot discern any reference in paragraphs 23 and 24 of the Inspector-General’s Statement of Facts and Contentions, nor was it put to Mr Grant, that he had failed to co-operate with his trustee beyond what may have been a failure to respond to the December 2007 request for information.
[11] At paragraph 85.
Similarly I do not regard the pattern of expenditure shown in the credit card statements, and analysed in some detail in the Inspector-General’s written submissions, as warranting the conclusion asserted in paragraph 4 of the Official Trustees’ stated reason for the objection. Even if I were to assume that all of the expenditure was that of Mr Grant it does not display an extravagant lifestyle when it is borne in mind that Mrs Grant was at all times in well-paying employment and had an interest in an apparently profitable business.
The matter is not one where a special ground has been specified so that the prohibition on cancellation in s 149N(1A) of the Bankruptcy Act does not apply. Given that I am satisfied that the reasons given by the Official Trustee for objecting did not justify the making of the objection I am obliged by s 149N(1) of the Bankruptcy Act to cancel the objection.
I certify that the 52 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC
Signed:         ...........................Signed.........................................
  Melissa Hamblin, Associate
Date of Hearing  28 July 2009
Date of Decision  17 August 2009
The Applicant appeared in person
Solicitor for the Respondent     Australian Government Solicitor

GENERAL ADMINISTRATIVE DIVISION		)
Re		DENNIS JOHN GRANT