Diamond and Inspector-General in Bankruptcy

This matter concerned an application for review of a decision by the Inspector-General in Bankruptcy, which affirmed a trustee's objection to the Applicant's discharge from bankruptcy. The Applicant had become bankrupt in August 2018. A trustee filed a notice of objection to the Applicant's discharge in October 2020. Following an initial decision by the Inspector-General not to review the objection, and a subsequent own-initiative review, the Inspector-General ultimately confirmed the trustee's objection in October 2021. The Applicant sought a review of this final decision by the Administrative Appeals Tribunal.

The primary legal issues before the Tribunal were whether the trustee's notice of objection to the Applicant's discharge from bankruptcy was validly made, and whether the Inspector-General's decision to confirm that objection was correct. Specifically, the Tribunal had to consider the requirements for a notice of objection under section 149C of the *Bankruptcy Act 1966* (Cth), including the distinction between "special grounds" and other grounds for objection, and the obligation to state reasons for the objection. The Tribunal also had to determine the ownership of certain horses, as this was central to the grounds of objection.

The Tribunal reasoned that while the trustee's notice of objection did not specify any "special grounds" as defined in the Act, it was still required to set out the grounds of objection, refer to the supporting evidence, and state the trustee's reasons for objecting. The Tribunal examined the evidence presented by the Applicant regarding the ownership of several horses, including financial records and transfer forms. It found that the Applicant had failed to provide definitive proof of ownership for the horses, and that the available evidence, particularly transfer of ownership forms signed by the Applicant as "owner," supported the trustee's conclusion that the horses were owned by the Applicant personally, by a syndicate of which the Applicant was a part, or by the syndicate after the bankruptcy. The Tribunal noted that the use of a trust's bank account or ABN on registration forms was not probative of ownership.

The Tribunal concluded that the trustee's notice of objection was validly made, and that the Inspector-General's decision to confirm the objection was correct. The Tribunal found that the evidence established that the horses were owned by the Applicant or a syndicate associated with him, and that this provided sufficient grounds for the trustee to object to the Applicant's discharge from bankruptcy. The application for review was therefore dismissed.