Garrett and Inspector General in Bankruptcy
[2008] AATA 885
•18 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 885
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/2152
| GENERAL ADMINISTRATIVE DIVISION | ) | ||
| Re | ANDREW GARRETT | ||
Applicant
| And | INSPECTOR GENERAL IN BANKRUPTCY |
Respondent
| REASONS FOR DECISION
1. In the course of a directions hearing held by the Tribunal in this application on 6 August 2008 the Tribunal directed that a number of summonses to witnesses issued at the request of the applicant on 23 July 2008 be revoked and that the applicant’s request for a number of further summonses to be issued to various parties be refused. 2. The applicant has requested the Tribunal to furnish him with a statement in writing of the Tribunal’s reasons for its decision. 3. The Tribunal’s reasons for decision are provided in the attachment. |
.....(sgd) Mr A Sweidan...................
Senior Member
CATCHWORDS
Practice and procedure – issue of summonses – revocation of summonses issued – refusal of application to issue other summonses – extension of time application – persons summonsed to give evidence concerning substantive application for review – such evidence not directly relevant to extension of time application as Tribunal not required to conduct merits review on hearing of application for extension of time
LEGISLATION
Bankruptcy Act 1966 (Cth), s149K(5), s149P(3), s149P(4), s149(D)(1)(j), s149(D)(1)(ma),
s149(D)(1)(ha), s149(D)(1)(i), s149(D)(1)(da), s149(D)(1)(e), s149(D)(1)(l), s 149(D)(1)(b), and s149(D)(1)(n).
Administrative Appeals Tribunal Act 1975 (Cth), s 29(1), s 29(2) and s40
CASES
Castallano v Inspector General in Bankruptcy (1998) 51 ALD 254
Cosco Holdings Pty Ltd v FCT (1997) 37 ATR 432;
Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344
Re Bird and Military Rehabilitation and Compensation Commission (2006) 91 ALD 691
Re Moore and Military Rehabilitation and Compensation Commission (2006) 90 ALD 417
Re Perpetual Trustee Co (Canberra) Ltd and CMR for ACT Revenue (1993) 29ALD 817
Re Sam Mercorella Pty Ltd and Australian Apple and Pear Corp (1987) 12 ALD 520
REASONS FOR DECISION
| 18 September 2008 | Mr A Sweidan, Senior Member |
The Application
The applicant, Andrew Garrett ('the Bankrupt') has applied, by an application dated 16 May 2008 for an extension of time for lodging an application for a review of a decision of the respondent dated 18 December 2007.
Relevant Legislation
Pursuant to paragraph 149K(1)(b) of the Bankruptcy Act 1966 (Cth) ('the Act'), the Inspector-General may review a decision of the trustee to file a notice of objection if requested to do so by a bankrupt for reasons that appear to the Inspector-General to be sufficient to justify such a review.
Pursuant to subsection 149K(5) of the Act, within 60 days after the request is lodged, the Inspector-General must:
3.1 decide whether to review the decision; and
3.2if the Inspector-General decides to review the decision - make his or her decision on the review.
If the Inspector-General considers there are not reasons sufficient to justify such a review he or she may refuse the request. In that case, in accordance with s 149P of the Act, written notice must be given setting out the decision together with the evidence or other material relied on and reasons.
Subsections 149P(3) and (4) of the Act provide that notice must be provided to the bankrupt stating that if the bankrupt is dissatisfied with the decision, an appeal may be made to the Administrative Appeals Tribunal pursuant to subsection 29(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). Any such application must be made within 28 days of receipt of the letter of decision of the Inspector-General: subsection 29(2) of the AAT Act.
Subsection 29(7) of the AAT Act provides that the Tribunal may, upon an application in writing, extend the time for the making of an application for review of a decision if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.
Facts
On 24 September 2004 the applicant was declared bankrupt. Peter Macks, a chartered accountant with the firm PPB, was appointed trustee of the Bankrupt's estate (“the Trustee”).
On 23 October 2007, the Trustee filed a Notice of Objection to Discharge (“the Objection”) pursuant to section 149B of the Act. The Trustee based the Objection on 10 grounds specified in section 149D of the Act.
On 11 November 2007, the Bankrupt requested the respondent to review the decision of the Trustee to file the Objection (“the Request for Review”).
On 18 December 2007, the respondent wrote to the Bankrupt to notify him of his decision to cancel the Objection based on the grounds specified in paragraphs 149D(1)(j) and 149D(1)(ma) of the Act and of his decision to refuse to review the Objection on each of the eight other grounds specified in paragraphs 149D(1)(ha), 149D(1)(i), 149D(1)(da), 149D(1)(d), 149D(1)(e), 149D(1)(l), 149D(1)(b), 149D(1)(n) of the Act (“the Decision”).
The effect of the Decision is that the Bankrupt will remain bankrupt and be due for discharge on 23 November 2012, being eight years from the date on which the Bankrupt filed his Statement of Affairs.
The respondent sent a copy of the Decision to the Bankrupt at his PO Box address on 18 December 2007. The Bankrupt claims that he received a copy of the decision on 7 January 2008.
If the Bankrupt's evidence of date of receipt is accepted the last day for the Bankrupt to seek a review of the Decision by the Tribunal was 4 February 2008.
The Bankrupt applied, by an application dated 16 May 2008, for an extension of time for lodging an application for a review of the Decision. The Bankrupt is three and a half months late in his application. However if the letter containing the Decision was received in the ordinary course of post (see section 29 of the Acts Interpretation Act 1901) then the Bankrupt is some five months late.
Extension of time
The Tribunal when considering whether to grant or refuse an extension of time pursuant to s 29(7) of the AAT Act has repeatedly applied the principles formulated by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-350 which are as follows:
“(a) the prescribed period of 28 days is not to be ignored. Indeed, it is a prima facie rule that proceedings commenced outside that period will not be entertained. It is a precondition to the exercise of discretion in his favour that the applicant for extension show "an acceptable explanation of the delay" and that it is "fair and equitable in the circumstances" to extend time;
(b) consideration of the other action taken by the applicant is relevant to the question of whether an acceptable explanation for the delay has been furnished;
(c) any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension;
(d) ….mere absence of prejudice is not enough to justify the grant of an extension….public considerations often intrude;
(e) the merits of the substantial application are properly to be taken into account; and
(f) considerations of fairness as between the applicants and other persons otherwise in a like position are relevant.”
Issue of Summonses
Prior to the directions hearing held by the Tribunal in this application on 6 August 2008 the Tribunal had on the application of the applicant issued summonses to a number of parties which summonses were issued pursuant to the provisions of s 40 of the AAT, and required those parties to attest and give evidence at the hearing of the applicant’s extension of time application.
Subsequent to the issue of those summonses (“the first summonses”) the applicant requested that further summonses be issued to a number of other witnesses. Those further summonses (“the second summonses”) had not been issued at the time of the directions hearing.
Directions Hearing
At the directions hearing the applicant confirmed, in response to questions from the Tribunal, that the persons to whom the first summonses had been addressed as well as the persons to whom the second summonses were addressed were required by the applicant to attend to give evidence on matters relating to the merits of the applicant’s review application. The Tribunal informed the applicant that the Tribunal, when considering whether to grant an extension of time, would not be undertaking a merits review of the respondent’s decision in relation to which the applicant’s substantive application for review had been lodged although the Tribunal would take the apparent merits of the substantive application into account as one of the factors to be considered in determining the application for an extension of time.
The Tribunal then made orders directing that the first summonses be revoked and that the applicant’s application to issue the second summonses be refused.
Legislation and Case Law
The power of the Tribunal to issue summonses is contained in s 40 of the AAT Act. That section reads, relevantly, as follows:
“40 Powers of Tribunal etc.
(1) For the purpose of reviewing a decision, the Tribunal may:
(a) take evidence on oath or affirmation;
(b)proceed in the absence of a party who has had reasonable notice of the proceeding; and
(c) adjourn the proceeding from time to time.
Summons
(1A)Subject to subsection (1B), for the purposes of the hearing of a proceeding before the Tribunal, the member presiding at the hearing, the Registrar, a District Registrar or a Deputy Registrar may summon a person to appear before the Tribunal at that hearing:
(a) to give evidence; or
(b)to give evidence and produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons; or
(c)to produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons.
(1B)A summons under subsection (1A) may require a person to appear at a directions hearing to produce books, documents or things instead of at the hearing before the Tribunal.
(1C)A person (other than a presidential member, a senior member or an authorised member) who, under subsection (1A), may summon a person to appear before the Tribunal must not refuse a request to do so unless the refusal is authorised by a presidential member, a senior member or an authorised member.”
It is clear that the power of the Tribunal to issue a summons is discretionary and an application may be refused. The general principles relating to the issue of subpoenas by a court are applicable to the issue of a summons by the Tribunal;
Cosco Holdings Pty Ltd v FCT (1997) 37 ATR 432;
Re Moore and Military Rehabilitation and Compensation Commission (2006) 90 ALD 417.
Although s 40 of the Act does not contain specific power to revoke amend or vary a summons issued by the Tribunal it has been held in a number of cases that the Tribunal may revoke amend or vary a summons if good reason is shown:
Re Perpetual Trustee Co (Canberra) Ltd and CMR for ACT Revenue (1993) 29ALD 817;
Re Bird and Military Rehabilitation and Compensation Commission (2006) 91 ALD 691;
The Tribunal notes that in Bird supra it was held that a summons should be refused if it was not issued for legitimate forensic purpose or was too general.
Tribunal’s Reasons for Revoking First Summonses and Refusing Issue of Second Summonses
In this case the Tribunal is not required to investigate further on an application for extension of time than to see whether the applicant’s case has an obvious weakness or is unlikely to succeed – Re Sam Mercorella Pty Ltd and Australian Apple and Pear Corp (1987) 12 ALD 520.
While the Tribunal is required as held in Hunter Valley Developments (supra) to consider the merits of the substantive application and take same into account when determining an application for extension of time the authorities make it clear that the Tribunal is not required to make any definitive finding on the merits of the case for the purpose of the application for an extension of time. It is only required to ascertain whether there is some worthwhile case which stands behind the application for an extension of time and which could be agitated by the applicant with respect to the substantive application for review:
Mercorella (supra)
Castallano v Inspector General in Bankruptcy (1998) 51 ALD 254
In the Tribunal’s view it follows that the Tribunal, when dealing with an extension of time application, is not required to issue summonses and hear evidence from summonsed witnesses where that evidence relates solely to the substantive application for review and the Tribunal is of the view that it should exercise it’s discretion not to do so.
The Tribunal having come to this view determined that the first summonses should be revoked and the application to issue the second summonses should be refused for the reasons stated above.
I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member
Signed: ...(sgd) T Freeman............
Associate
Date of Hearing 6 August 2008
Date of Decision 6 August 2008
Reasons for Decision 18 September 2008
Applicant Self-Represented
Counsel for the Respondent Mr J Giacco
Solicitor for the Respondent Australian Government Solicitor
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