Dubow and Inspector-General in Bankruptcy
[2012] AATA 575
•30 August 2012
[2012] AATA 575
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/2642
Re
Yolande Victoria Frances Dubow
APPLICANT
And
Inspector-General in Bankruptcy
RESPONDENT
DECISION
Tribunal Deputy President P E Hack SC
Date 30 August 2012 Place Brisbane The application is dismissed pursuant to s 42B(1)(a) of the Administrative Appeals Tribunal Act 1975 (Cth).
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Deputy President P E Hack SC
CATCHWORDS
PRACTICE AND PROCEDURE – Application for dismissal pursuant to s 42B – bankruptcy contribution assessment – liability to pay a contribution – fresh income assessment by trustee – lack of utility to applicant – application dismissed.
LEGISLATION
Bankruptcy Act 1966 (Cth) ss 139S, 139T, 139W, 139ZA, 139ZF
Administrative Appeals Tribunal Act 1975 (Cth) ss 26, 42BCASES
Fearnley v Australian Fisheries Management Authority [2006] FCAFC 3; (2006) 94 ALD 519
Re Brian Reddish and Civil Aviation Safety Authority [1999] AATA 721
Re Williams and Australian Electoral Commission (1995) 38 ALD 366REASONS FOR DECISION
Deputy President P E Hack SC
30 August 2012
The applicant, Ms Yolande Dubow, became a bankrupt on the acceptance of a debtor's petition on 20 March 2012. The Official Trustee in Bankruptcy became the trustee of her estate by operation of law but was later replaced by a registered trustee, Mr Andrew Barnden, on 26 April 2012[1].
[1]I have taken the procedural history from the submissions of the respondent. I have assumed that history to be accurate in the absence of any correction of it in the applicant's submissions.
On 28 May 2012 the trustee made an assessment of Ms Dubow’s income for the 12 month period commencing 20 March 2012 and the contributions that Ms Dubow was liable to pay in respect of that period under s 139S of the Bankruptcy Act 1966 (Cth). On 31 May 2012 Ms Dubow requested the Inspector-General in Bankruptcy to review that assessment. By virtue of s 139ZA of the Act the Inspector-General was not obliged to comply with that request; the Inspector-General had power to do so,
if requested to do so by the bankrupt for reasons that appear to the Inspector-General to be sufficient to justify such a review.
The Inspector-General was obliged to decide, within 60 days after the request was lodged, whether to review the decision and, if a decision was made to review the decision, to make a decision on the review[2].
[2] See s 139ZA(5), Bankruptcy Act 1966.
On 7 June 2012 a delegate of the Inspector-General decided to refuse the request to review the trustee’s assessment on the basis that there was "insufficient reason to conduct a review". That decision was, by virtue of s 139ZF of the Act, able to be reviewed in the Tribunal. Ms Dubow lodged an application for a review of the decision on 25 June 2012.
I ought, at this juncture note that once the trustee had made an assessment it was open to Ms Dubow to apply to the trustee for the making of the determination under s 139T of the Act. That section permits the trustee to determine a higher income threshold than that which the Act would produce if the trustee was satisfied that the bankrupt would suffer hardship if required to pay the usual contribution. But, by virtue of s 139T(1) of the Act, the bankrupt must apply in writing to the trustee for the making of such a determination. Ms Dubow did not make such an application to the trustee. Instead, she appears to have made such a request to the Inspector-General in her request of 31 May 2012 for a review of the assessment. When, on 7 June 2012, the delegate of the Inspector-General refused the request for a review, the delegate pointed out to Ms Dubow the requirement for her to apply to the trustee first in writing for a determination under this section.
Then on 25 July 2012 the trustee, of his own motion, made a fresh assessment of Ms Dubow's liability to pay a contribution. That power is conferred by s 139W(2) of the Act in these terms:
(2)If at any time, whether during or after a contribution assessment period, any one or more of the following paragraphs applies or apply:
(a)the trustee is satisfied that the income that is likely to be derived, or was derived, by the bankrupt during that period is or was greater or less than the amount of that income as assessed by the last preceding assessment in respect of that period;
(b)the base income threshold amount increased or decreased after the making of the last preceding assessment in respect of that period and before the end of that period;
(c)the trustee is satisfied that the number of the bankrupt’s dependants increased or decreased after the making of the last preceding assessment and before the end of that period;
the trustee is to make a fresh assessment of the income that is likely to be derived, or was derived, by the bankrupt during that period, of the actual income threshold amount that is applicable in relation to the bankrupt when the assessment is made and of the contribution (if any) that the bankrupt is liable to pay in respect of that period.
The language of the section makes it plain that the trustee’s decision is not discretionary; if one or more of the matters in paragraphs (a), (b) or (c) applies, the trustee “is to make a fresh assessment”. The trustee’s decision is also reviewable in the same way as the trustee's original assessment decision, that is by request in the first instance to the Inspector-General followed by an application to review any subsequent decision by the Inspector-General in the Tribunal.
In light of the trustee's decision of 25 July 2012 the Inspector-General now applies for an order pursuant to s 42B(1)(a) of the Administrative Appeals Tribunal Act 1975 (Cth) dismissing the proceedings on the basis that they are frivolous or vexatious. The matter came before me at a directions hearing on 1 August 2012 however it appears that Ms Dubow was not on notice as to the nature, or the basis, of the Inspector-General’s application. In the result, directions were made for the parties to lodge and serve written submissions. That has now been done.
Section 42B(1)(a) of the Administrative Appeals Tribunal Act is in these terms,
(1)Where an application is made to the Tribunal for the review of a decision, the Tribunal may, at any stage of the proceeding, if it is satisfied that the application is frivolous or vexatious:
(a)dismiss the application; …
The Inspector-General submits that the proceedings are now frivolous and vexatious because there is no longer any utility in them; the subject matter of the proceedings no longer exists as the trustee's original decision has been rendered moot by his subsequent decision of 25 July 2012. The Inspector-General’s submissions acknowledge that Ms Dubow had an interest in the proceedings at the outset but, by reference to the decisions in Re Williams and Australian Electoral Commission[3] and Fearnley v Australian Fisheries Management Authority[4], contend that “the interest that gave the Applicant standing for the proceedings has ceased to exist and that no legitimate purpose can be achieved by continuing them”.
[3] (1995) 38 ALD 366.
[4] [2006] FCAFC 3; (2006) 94 ALD 519.
It is not easy to discern the basis on which Ms Dubow resists the Inspector-General's application. Her submissions do not directly challenge the proposition implicit in the Inspector-General’s submissions i.e. that proceeding with no continuing utility ought to be dismissed. Rather, and aside from some complaint about the procedure adopted by the Inspector-General, Ms Dubow submits that there is continuing utility. That is so, she says, because it was “not competent” for the trustee to make the 25 July 2012 decision. That decision, she argues, “is null and void”. The trustee was prevented from making a re-assessment, she submits, because of s 26 of the Administrative Appeals Tribunal Act. It provides, so far as is relevant,
(1)Subject to section 42D, after an application is made to the Tribunal for a review of a decision, the decision may not be altered otherwise than by the Tribunal on the review unless:
(a)…
…
(b)the parties to the proceeding, and the Tribunal, consent to the making of the alteration.
(2)A reference in subsection (1) to the alteration of a decision is a reference to:
(a)the variation of a decision; or
(b)the setting aside of a decision; or
(c)the setting aside of a decision and the making of a decision in substitution for the decision set aside.
It is right to say, as does Ms Dubow, that neither she nor the Tribunal has consented to altering the trustee’s original decision. However it seems to me, with respect, that Ms Dubow's reliance on s 26 is misplaced. The trustee, in making the decision of 25 July 2012, has not altered the decision which is the subject matter of these proceedings; the trustee has made a fresh decision which leaves the original decision intact as a matter of form but renders it moot as a matter of substance. But that practical effect does not mean that the trustee has altered the original decision. Having been satisfied of one or other of the matters in paragraphs (a) to (c) of s 139W(2) of the Bankruptcy Act he was bound to give effect to the section and make a “fresh” assessment. Section 26 of the Administrative Appeals Tribunal Act is not an impediment to the trustee making a fresh decision.
Ms Dubow's submissions contend that s 139T(2) of the Bankruptcy Act has not been considered in either the review by the Inspector-General or in the trustee’s fresh assessment. That may be right but if it is, it is because Ms Dubow appears not to have requested the trustee to make such a determination. The Inspector-General has already pointed out to Ms Dubow in correspondence the need for her to make an application in writing for such a determination.
Ms Dubow places some reliance on the fact of her having made an application to the Federal Magistrates Court for annulment of her bankruptcy. That application was heard in that Court on 25 June 2012 and the decision reserved. Ms Dubow submits that it would be “redundant” for the present proceedings to continue until such time as a decision on that application has been made. In other circumstances that submission might be accepted however where, as here, application is made for the dismissal of the whole of the proceedings it is necessary to consider and decide that application. The other matters covered in Ms Dubow’s submissions agitate the merits of the trustee’s decision and question the legitimacy of other decisions by the trustee; they do not go to the issue that I have to decide in this application.
In my view the Inspector-General's submissions must be accepted. Given that the trustee has made a fresh assessment there is no continuing utility in the present proceedings. It would be a waste of public and private resources to continue with these proceedings. There is a considerable body of jurisprudence in the Tribunal concerning applications that lack utility and, for that reason, may be regarded as being frivolous or vexatious. In Re Brian Reddish and Civil Aviation Safety Authority[5] Deputy President AM Blow OAM QC (as his Honour then was) considered the authorities and concluded that,
…an application to this Tribunal may be dismissed on the ground that it is frivolous if the Tribunal is unable to make a decision that would be of any practical benefit to the applicant.
Given that a fresh assessment has been made there is no decision that this Tribunal could make in relation to the original decision that would be of any practical benefit to Ms Dubow. The present case is quintessentially one where the making of a fresh assessment has deprived a review of the original assessment of any utility.
[5] [1999] AATA 721.
If Ms Dubow wishes to agitate the correctness of the trustee’s contribution assessment she can, and ought, seek a review of the assessment that presently prevails; there is no point in seeking a review of one that has been rendered otiose by the making of a fresh assessment.
In those circumstances I will dismiss Ms Dubow's application pursuant to s 42B(1)(a) of the Administrative Appeals Tribunals Act.
I certify that the preceding 14 (fourteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC.
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Associate
Dated 30 August 2012
Date of hearing 1 August 2012 Date final submissions received 13 August 2012
Applicant Self represented
RespondentMr M Findlay, Delegate, Inspector-General in Bankruptcy
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