Do and Inspector-General in Bankruptcy - [2020] AATA 1528

Do and Inspector-General in Bankruptcy [2020] AATA 1528 (2 June 2020)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2020/2037
Re:Tien Dung Do
APPLICANT

AndInspector-General in Bankruptcy
RESPONDENT

DECISION
Tribunal:Senior Member D O'Donovan
Date:2 June 2020
Place:Canberra

The Tribunal refuses to extend the time for making an application for review of a decision made by the Inspector-General in Bankruptcy on 8 September 2017.
........................................................................
Senior Member D O'Donovan
PRACTICE AND PROCEDURE – Taxation and Commercial – decision by delegate to affirm Trustee’s objection to discharge bankrupt estate – interlocutory application for an extension of time – application for review made outside the prescribed time– explanation for the delay inadequate - whether it is reasonable in all the circumstances to grant the extension of time – delay outweighs other competing considerations – application refused
Administrative Appeals Tribunal Act 1975 s 29
Bankruptcy Act 1966 ss 77(1)(G)(ii), 149(4), 149D(1)(d), 149D(1)(e), 149D(1)(g)(i), 149D(1)(g)(ii), 149D(i), 149D(1)(ia), 149F, 149K, 149N
Arbon and Comcare [2017] AATA 2870
Seiler v Minister for Immigration, Local Government and Ethnic Affairs [1994] FCA 12
REASONS FOR DECISION
Senior Member O'Donovan
2 June 2020

This is an application pursuant to s 29(7) of the Administrative Appeals Tribunal Act 1975 (the Act) seeking to extend the time for making an application for review of a decision. The applicant lodged the application on 7 April 2020 with respect to a decision that was made on 8 September 2017. The application is brought 914 calendar days beyond the prescribed time for making an application for review.
The decision under review was made by a delegate of the Inspector-General in Bankruptcy. The decision was to uphold the decision of Mr Do’s trustee in bankruptcy to object to Mr Do’s discharge on the grounds set out in sections 149D(1)(d), 149D(1)(e), 149D(1)(g)(i), 149D(1)(g)(ii), 149D(i), and 149D(1)(ia) of the Bankruptcy Act 1966 (the Bankruptcy Act). The effect of the decision was that Mr Do will remain bankrupt until 18 March 2025 unless the objection is withdrawn by the trustee, the bankruptcy is annulled, or the decision of the Inspector-General is overturned by the Administrative Appeals Tribunal (Tribunal) or the Federal Court or Federal Circuit Court.
In response to the applicant’s application for an extension of time to seek review, on 17 April 2020, the Respondent notified the Tribunal that it did not oppose the granting of an extension of time. However, the Respondent drew the Tribunal’s attention to the articulation of the applicant’s appeal rights in the delegate’s decision letter and provided email correspondence of an exchange between the Applicant and his trustee in bankruptcy dated 1 and 3 October 2019.
On 23 April 2020, the Tribunal wrote to the parties indicating that it was not persuaded, on the material currently before it, that an extension of time should be granted. The Tribunal notified the applicant of its proposed process in the following terms:
The Tribunal asks that you file any further material (and evidence) upon which you wish to rely in support of your…

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: [2020] AATA 1528
Decision Date: 2 June 2020

CaseChat Overview and Summary

The applicant sought an extension of time to seek a review of a decision made by the Inspector-General in Bankruptcy. The dispute concerned the applicant's bankruptcy and his discharge from it. The matter came before the Tribunal for consideration of whether to exercise its discretion to grant the extension.

The Tribunal was required to determine whether it was reasonable in all the circumstances to grant the applicant an extension of time for his application. This involved considering several factors, including the length of the delay, the applicant's explanation for the delay, whether the applicant had taken steps to inform the Inspector-General that he contested the decision, and the substantive merits of the applicant's case.

The Tribunal found that the applicant's explanations for the extensive delay were weak, and this weighed heavily against granting an extension. Furthermore, there was insufficient evidence that the applicant had taken steps to make the Inspector-General aware that he did not accept the decision, which also weighed against the applicant. While the respondent did not present evidence of specific prejudice due to the delay, the Tribunal noted that the historical nature of the matters to be considered could lead to prejudice through loss of memory or access to material. The applicant's submissions on the merits focused on a dispute regarding assets held for a self-managed superannuation fund, which the Tribunal indicated was a matter for the trustee in bankruptcy to determine. The Tribunal noted that the reviewable decision relied on specific failures by the applicant, including a failure to comply with requests for information about property and to provide his passport to the trustee.

The Tribunal was not satisfied that it was reasonable in all the circumstances to extend the time for the applicant to make his application for review.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

On 23 April 2020, the Tribunal wrote to the parties indicating that it was not persuaded, on the material currently before it, that an extension of time should be granted. The Tribunal notified the applicant of its proposed process in the following terms:The Tribunal asks that you file any further material (and evidence) upon which you wish to rely in support of your application for an extension of time by 15 May 2020.The material you submit should address the following matters, which are relevant to the exercise of the Tribunal’s discretion to extend time (noting that you have already raised matters which will be taken into account):1.The length of the delay;2.Your explanation for the delay;3.Whether you took any steps after the decision of the delegate to make the delegate aware that you contested the delegate’s decision; 4.The basis on which you will contest the merits of the delegate’s decision.Do not feel constrained by this list. The test for whether the time for making an application should be extended is whether the Tribunal is satisfied that it is reasonable in all the circumstances to do so. Accordingly, there may be other matters which you wish to bring to the Tribunal’s attention which may be relevant. On 15 May 2020, the Applicant provided the Tribunal with a written submission and attached a letter dated 14 May 2020 from Chamberlains Law Firm, representing the trustee in bankruptcy, in respect of Federal Circuit Court proceedings as well as the Amended Originating Application made by the trustee in bankruptcy in the Federal Circuit Court. On 20 May 2020, the Applicant wrote an unsolicited email to the Tribunal containing a short submission in addition to his submission of 15 May 2020. The Tribunal must now consider whether to exercise its discretion to extend the time for making an application for review. It can only exercise that discretion if it is satisfied that it is reasonable in all the circumstances to do so. In its consideration, the Tribunal has taken into account the application for an extension of time, the applicant’s submissions and has taken into evidence the following documents:(a)Exhibit 1 – Letter of Vincents, Applicant’s trustee in bankruptcy, dated 7 July 2017 notifying of the lodgement of a Notice of Objection to the Applicant’s discharge from bankruptcy and enclosing the Objection and further information.(b)Exhibit 2 - Reviewable Decision of the Inspector-General in Bankruptcy dated 8 September 2017.(c)Exhibit 3 – Email exchange between the Applicant and his trustee in Bankruptcy between 1 and 3 October 2019.(d)Exhibit 4 – Amended Originating Application in the Federal Circuit Court.(e)Exhibit 5 – Letter of Chamberlain’s Law Firm, representing the trustee in bankruptcy, dated 14 May 2020 in respect of Federal Circuit Court.STATUTORY FRAMEWORK Under normal circumstances a bankrupt is discharged from bankruptcy three years after he files his statement of affairs.[1][1] The Bankruptcy Act s 149(4).

Decision

Reasons for decision

The applicant’s explanations for delay are weak and the length of delay is extensive accordingly this factor weighs heavily against the grant of an extension.WHETHER HE TOOK ANY STEPS TO MAKE THE INSPECTOR-GENERAL AWARE THAT HE DID NOT ACCEPT THE DECISION. Based on the material before me I am not satisfied that the applicant took steps to make the Inspector-General aware that he did not accept the decision. The applicant says that in 2017 he approached the Ombudsman to request a review.[11] Given that I am satisfied that he understood his review rights it is not relevant that he approached the Ombudsman. Further, as the Ombudsman has a formal statutory role in relation to the Inspector-General’s powers (see s 149K(2)), I am confident that if the Ombudsman would have provided accurate information to the applicant about his review rights if an approach was made.[11] Applicant’s application for extension of time dated 6 April 2020. The applicant also claims that he contested with the delegate the extension of the bankruptcy.[12] However, he provides no particulars at all of when and how he contested the extension; he does not indicate on what day this occurred or by what means. On the information provided I am not satisfied that the applicant ever contested the decision with the delegate.[12] See applicant’s email dated 15 May 2020 to Nakita Bache at the Tribunal. There is no evidence that the applicant advised the Inspector-General that he was contesting the decision and accordingly this criteria weighs against the applicant.PREJUDICE TO THE RESPONDENT There is no evidence of any specific prejudice to the respondent. However, I note that the Bankruptcy Act limits the range of conduct which the Tribunal can have regard to in undertaking its review.[13] Accordingly, the matters which must be established are inevitably historical. Prejudice may well arise as a consequence of the loss of memory of witnesses or the loss of ready access to relevant material. However, I note that the respondent has not suggested it has been prejudiced by delay. In those circumstances I will treat this factor as neutral.[13] Provision of bankruptcy actTHE SUBSTANTIVE MERITS The applicant’s submissions on the merits of the decision are uncontested by the respondent. The focus of the applicant’s submission is an attack on the trustee in bankruptcy’s decision in relation to assets he claims are not his but which he holds as trustee for a self-managed superannuation fund. Whether that is or is not the case is a matter for the trustee in bankruptcy to determine. The principle concern in Tribunal proceedings, if an extension of time is granted, will be whether there is evidence to support the special grounds relied on and whether the applicant had a reasonable excuse for the conduct constituting the special ground. No notice is to be taken of any conduct of the bankrupt after the time when the ground commenced to exist. In the reviewable decision, reliance is placed on specific failures by the applicant to do certain things, these include:(a)A failure to comply with a request from the trustee to provide information about the bankrupt’s property dated 28 March 2017.[14] (b)A failure to explain adequately to the trustee why no money was received as a result of the disposal of specific property or what was done with the money received as a result of the disposal of that property, notwithstanding that three letters dated 8 December 2016, 5 January 2017 and 28 March 2017 sought information in relation to the disposals. (c)A failure to give to the trustee the applicant’s passport pursuant to section 77(1)(g)(ii) notwithstanding a letter directing him to do so dated 28 March 2017. On 10 July 2017 the applicant denied that the issue had ever been raised with him before. The trustee’s submission, which included a copy of the letter directing the applicant to provide the passport established to the inspector-General’s satisfaction that this was not the case[14] The Bankruptcy Act s 149D(1)(d).

Ratio Decidendi

Legal Principle Established

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