Hughes and Insolvency and Trustee Service Australia
[2003] AATA 511
•30 May 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 511
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W 2003/116
GENERAL ADMINISTRATIVE DIVISION ) Re DEREK HUGHES Applicant
And
INSOLVENCY AND TRUSTEE SERVICE AUSTRALIA
Respondent
DECISION
Tribunal Ms G Ettinger - Senior Member
Ms L Savage Davis - MemberDate 30 May 2003
PlacePerth
Decision The Administrative Appeals Tribunal affirms the decision of the Insolvency and Trustee Service Australia (“ITSA”), dated 17 March 2003 rejecting the application to vary Mr Derek Hughes’ contribution payment on hardship grounds pursuant to section 139T(2)(a) of the Bankruptcy Act 1966.
…........(sgd G Ettinger).......................
Ms G Ettinger Senior Member
catchwords
Bankruptcy – request to vary contribution payments – whether hardship – decision affirmed
legislation
Bankruptcy Act 1966 s 139T(2)(a)
case law
Re Lumsden and SDSS (1986) 10 ALN N225
REASONS FOR DECISION
30 May 2003 Ms G Ettinger-Senior Member
Ms L Savage Davis - Member1. The decision under review before the Administrative Appeals Tribunal (“the Tribunal”) was the decision of Mr Jeremy White, Deputy Official Receiver, Insolvency and Trustee Service, Australia (“ITSA”), (“the Respondent”) in these proceedings to reject the application of Mr Derek Hughes, (“the Applicant”), to vary the contribution payment of $150 per fortnight on grounds of hardship pursuant to section 139T(2)(a) of the Bankruptcy Act 1966 (“the Act”).
2. Mr Hughes, who was self represented, attended the hearing and gave evidence. His wife, Mrs Sandra Hughes who assisted him in presenting his case, and Ms Beverley Hughes, their daughter also gave evidence. Mr Tim Carey, solicitor of the Australian Government Solicitor, represented the Respondent.
ISSUE BEFORE THE TRIBUNAL
3. The issue to be decided by the Tribunal was whether it could be reasonably satisfied on the evidence before it that the assessment of contribution payable to the Respondent should be varied as claimed by Mr Hughes on the grounds of hardship pursuant to section 139T(2)(a) of the Act.
LEGISLATION
4. The relevant legislation is section 139T of the Bankruptcy Act 1966 (“the Act”). This section enables the Respondent, and accordingly the Tribunal, to vary the contribution made by the Applicant if he can be shown to suffer hardship. Section 139T(13) of the Act enables the Tribunal to review decisions made by the Official Receiver under section 139T of the Act. Section 139T(1) of the Act provides that if the Trustee has made an assessment of a contribution that a bankrupt is liable to pay, and the bankrupt considers that if required to pay, he or she will suffer hardship as set out in Section 139T(2) of the Act, he or she may apply for a determination to vary the contribution. Section 139T(2) specifies the following reasons for which application may be made as follows:
- SECT 139T
Official Receiver may vary contribution if bankrupt suffers
hardship(1)If:
(a) the trustee has made an assessment of a contribution that a bankrupt is liable to pay to the trustee in respect of a contribution assessment period; and
(b) the bankrupt considers that, if required to pay that contribution, he or she will suffer hardship for a reason or reasons set out in subsection (2);
the bankrupt may apply in writing to the Official Receiver for the making of a determination under this section in respect of that period.
(2) The reasons for which an application may be made under subsection (1) are as follows:
(a) the bankrupt or a dependant of the bankrupt suffers from an illness or disability that requires on-going medical attention and the supply of medicines, and the bankrupt is required to meet a substantial proportion of the costs of that medical attention or those medicines from his or her income;
(b) the bankrupt is required to make payments from his or her income to meet the cost of child day-care to enable the bankrupt to continue in employment or other work;
(c) the bankrupt is living in rented accommodation not provided by, or by an authority of, the Commonwealth, a State or a Territory, or by a local government authority, and the bankrupt is required to pay the cost of that accommodation wholly or mainly from his or her income;
(d) the bankrupt incurs substantial expense in travelling to and from the bankrupt's place of employment or other work, whether by public transport or otherwise;
(e) the spouse of the bankrupt, or another person residing with the bankrupt, who ordinarily contributes to the costs of maintaining the bankrupt's household has become unable to contribute to those costs because of unemployment, illness or injury;
(f) any other reason prescribed by the regulations.
(3) The Official Receiver must not make a determination under this section unless the bankrupt provides satisfactory evidence of the bankrupt's income and expenses, and any other matters on which the bankrupt relies to establish the reasons for the application.
(4) The Official Receiver must decide the application as soon as practicable, and in any event not later than 30 days, after the day on which the application is received.
(5) If the Official Receiver does not make a decision on the application within that period of 30 days, the Official Receiver is taken to have made a decision at the end of that period refusing the application.
(6) If the Official Receiver is satisfied that the bankrupt will suffer hardship if required to pay the contribution, the Official Receiver may determine that, for the purposes of the application of section 139S in relation to the bankrupt in respect of the contribution assessment period, the actual income threshold amount that was applicable in relation to the bankrupt when the assessment was made is taken to have been increased to such amount as the Official Receiver determines.
(7) If the Official Receiver is not satisfied that the bankrupt will suffer hardship if required to pay the contribution, the Official Receiver is to refuse the application.
(8) If the Official Receiver makes a determination under subsection (6), the Official Receiver has all the powers of the trustee in relation to the bankrupt in respect of the contribution assessment period and may make such assessment under section 139W as is necessary to give effect to the determination.
(9) An assessment made by the Official Receiver in accordance with subsection (8) is taken to have been made by the trustee.
(10) The Official Receiver must give written notice to the bankrupt and, if the trustee is a registered trustee, to the trustee:
(a) setting out the Official Receiver's decision on the application; and
(b) referring to the evidence or other material on which the decision was based; and
(c) giving the reasons for the decision.
(11) A notice given under subsection (10) to the bankrupt must include a statement to the effect that, if the bankrupt is dissatisfied with the decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for review of the decision.
(12) A contravention of subsection (11) in relation to a decision does not affect the validity of the decision.
(13) An application may be made to the Administrative Appeals Tribunal for the review of a decision by the Official Receiver under this section.
(14) If the Administrative Appeals Tribunal sets aside a determination made by the Official Receiver under subsection (6), varies that determination, or sets aside that determination and makes a determination in substitution for that determination, the Official Receiver has, and is to exercise, the powers of the trustee under section 139W for the purpose of giving effect to the decision of the Administrative Appeals Tribunal.
5. The Official Receiver, and hence the Tribunal, in considering this matter as provided for in section 139T(13) of the Act, must not make a determination unless the Applicant provides satisfactory evidence of his or her income and expenses, and any other matters on which they rely, (section 139T(3) of the Act).
EVIDENCE BEFORE THE TRIBUNAL
6. The Tribunal had before it the documents (“the T-documents”) lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”), as Exhibit R1. In addition the following documents were also tendered during the hearing.
DOCUMENT
DATE
EXHIBIT NUMBER
Statement - Ms Beverley Ann Hughes
5 May 2003
Exhibit A1
Statement - Mrs Sandra Hughes
8 May 2003
Exhibit A2
Amended Statement - Mr Derek Hughes
28 April 2003
Exhibit A3
Notice of Assessment - Mr Derek Hughes
26 April 2002
Exhibit A4
Photocopies of Century 21 property descriptions in Bullsbrook
Exhibit R2
Record of CT (Register Number 49/P3830)
Exhibit R3
Mr Hughes - pay slip
1 April 2003 -14 April 2003
Exhibit R4
Consent Orders - Federal Court of Western Australia - Mr & Mrs Hughes & Mr Kim Holbrook
21 August 2002
Exhibit R5
Authority signed by Mr Hughes to authorise deduction from income to be paid to Mr Kim Holbrook of Holbrook and Associates
17 August 2002
Exhibit R6
MS BEVERLEY ANN HUGHES – DAUGHTER OF THE APPLICANT
7. Ms Beverley Hughes, whose statement dated 8 May 2003 was before the Tribunal as Exhibit A1, gave oral evidence. Ms Hughes told the Tribunal that she is 37 years old, works full-time as a finance officer for the Department of Justice, and also works on Saturdays running a saddling outlet at the races. Ms Hughes said her income might decrease at any time because she had been acting in a position higher than her substantive one. Although she and her sister live with their parents, they do not contribute to the mortgage, or by paying any rent.
8. Ms Hughes’ main evidence concerned the transfer of her parents’ property at Henley Brook to herself and her sister Christine Hughes (aged 33 years), which took place on 11 September 2001, to the value of $300,000 plus approximately $10,000 stamp duty paid. Ms Hughes told the Tribunal that this property had been the family home for some 18 years, and had the area and facilities required for her sister’s horses, her mother’s dogs, and to park her father’s truck which was too big to park on a suburban block. She said that as a result of her parents’ bankruptcy, they had been unable to re-finance the mortgage on the property. She said that she and her sister were able to arrange finance, and so the property was transferred to them so that the family could stay together in the family home. Ms Hughes said the arrangement was only possible because her parents agreed to sign a residential tenancy agreement. The rental to be paid under the agreement is $1,691 per month (or $390 per week), so that effectively her parents are paying the mortgage. She said that the family wished to continue living together and did not want to lose their family home.
9. Ms Hughes said if her parents could not pay the rent, or moved out, she would be forced to consider invoking the provisions under the lease agreement which would mean her parents would be responsible for paying for advertising to re-let the property, and cleaning and gardening costs to bring the garden up to an acceptable standard for a tenant. She also pointed out that if Mrs and Mrs Hughes had to move they would have expenses of a bond which had not been paid in connection with the present lease, and expenses buying furniture because most of the furniture in their existing house was built-in.
10. In cross-examination, Ms Hughes was shown Exhibit R2, and asked whether the properties depicted and described in the Exhibit, at a rental far lower than that currently paid by Mr and Mrs Hughes, would be able to accommodate and meet the specific needs of her parents and the family. She said it was not possible from the descriptions of the properties to know if dogs would be allowed, for example, and also noted that one at least of the homes depicted, was weatherboard, whereas their current home was brick and tile. Ms Hughes said she believed the properties depicted in Exhibit R2 were of a lesser standard than their present home. In any event Ms Hughes said, the family should not have to face the disruption of being forced from their own home. She gave evidence that except for a brief period of six months she and her sister had always lived with their parents.
11. Ms Hughes told the Tribunal that there were currently 15 horses on their property, and that her sister was responsible for them as she had a trainer’s licence. She said a third of the property was for the horses. Although no independent assessment of the rent had been obtained, she believed that market rent for the property would be between $300 to $350 per week.
12. In response to questions about the transfer of the property, Ms Hughes said it was independently valued before transfer. She could not recall exactly how much of the approximately $10,000 of stamp duty she herself had paid, but thought it might have been about $1,000.
13. Mr Carey asked Ms Hughes why she had offered to pay $1,300 to Mr Holbrook if her parents’ appeal at the Tribunal was successful. Ms Hughes said she had her own income and would make the payment to Mr Holbrook to get him out of her parents’ lives.
14. When asked about the security system that had been installed in their home, Ms Hughes said that break-ins in the area were common, and a vacant house nearby had been broken into a number of times. The Tribunal noted later in the hearing from Mrs Sandra Hughes’ evidence that the security system was non-operative.
MRS SANDRA HUGHES – WIFE OF THE APPLICANT
15. The Tribunal decided that because Mrs Sandra Hughes wished to assist her husband with representation, her evidence should be taken before Mr Hughes’ evidence. Her statement dated 8 May 2003 was before the Tribunal as Exhibit A2.
16. The Tribunal noted that in cross-examination Mrs Hughes agreed with the Respondent that the period in question to be taken into account with regard to assessment of the financial situation was the financial year ending 30 June 2003.
17. Mrs Hughes told the Tribunal that although the amount owed at the time of the bankruptcy did not seem large, the situation had been very financially embarrassing. She said they felt they were the victims of the Trustee, Mr Holbrook. Mrs Hughes said that if they had felt that the money was going to the creditors and not to the Trustee, they would not have had so much bad feeling towards Mr Holbrook. She said he had unlawfully intercepted Mr Hughes’ 2002 tax refund.
18. Mrs Hughes said that the appeal to the Tribunal was because of the health problems they were facing, in particular her husband’s, who had been diagnosed with cancer in November 2002. Her own health problems began when she was knocked over by a horse in May 1998. Mrs Hughes said that she sustained an elbow injury that did not, at the time, receive appropriate treatment. She said that subsequently she learnt surgery done privately to rectify the problem would cost about $2,000. She had not had this surgery done because of the costs, and her husband’s illness she said. Mrs Hughes said that she had an appointment with a surgeon the following week, and hoped surgery, as a public patient would be carried out soon.
19. Mrs Hughes said that as a result of the bankruptcy she lost her trainer’s licence in mid-1999, and said that this had been her profession for 25 years. She said that even though her daughter Christine now had a licence, Mr Hughes could not help much because of her elbow and knee conditions.
20. Mrs Hughes told the Tribunal that their attempt to do a composition in bankruptcy was defeated by the Trustee. She said they then paid him $7,000 to retain equity in their home that had vested in him. She said the relationship between them and the Trustee was very strained. Mrs Hughes said he had served an eviction notice on them on the evening of 23 December 1999. To save their home, the property was transferred to their daughters, and the parents paid rent to in effect pay the mortgage. Mrs Hughes said that her daughters could not afford to take on the property without this arrangement.
21. As to the value of the rental paid; Mrs Hughes said that although they did not find out what the market rental would be because there was no need to do so, she believed what they were paying was close to market.
22. The Respondent put it to Mrs Hughes that the rent was excessive given that she and her husband only used one third of the property and the daughters who also lived there gave them no discount, and made no contribution. Mrs Hughes told the Tribunal that Beverley owned a couple of the horses, as did some other people, who were in partnership with Christine. She said she was unaware of what income her daughter derived from the horses, but said Christine was not in receipt of social security benefits.
23. Mrs Hughes said that was the arrangement with her daughters so that they could keep the house, and she did not believe they should be forced from their home.
24. Mrs Hughes was asked about the $4,015 shown in her schedule in regard to costs of the security system at the house. She said only about $1,000 had been paid, and the system was now disconnected. She believed monitoring had cost approximately $50 to $60 per month.
25. Mrs Hughes told the Tribunal that an earlier tax refund of some $16,000 had been used to pay legal costs, and that the most recent tax refund of approximately $4,000 had been spent in legal costs in an unsuccessful action to have Mr Holbrook removed as Trustee.
26. As to medical costs, Mrs Hughes said that although her husband had had two treatments by Dr John Holt, a radiation oncologist, a third treatment was inevitable as his tumour, although now reduced in size, was still there. She said that Dr Holt was currently overseas, and that an appointment had been made to see him in early June 2003. She stated that the cost per treatment after the Medicare rebate was $3,040.95.
27. When asked to examine Exhibit R2 with regard to alternative accommodation, Mrs Hughes stated that it was not possible to know if dogs were allowed in the houses depicted. She said that moving would be costly, and in any event the family wanted to stay together where they were. Mr Hughes could park his truck where they were now, and as they only had one car, they would need to have another for Mr Hughes to get to work if the truck were parked elsewhere. When questioned about sharing a car, Mrs Hughes said she could not be expected to collect her husband from work at any time of the day or night when he finished a job.
28. Mrs Hughes told the Tribunal she believed that if they had to move, her daughters might invoke the penalties under the rental agreement even though Beverley had offered to pay Mr Holbrook $1,300 if they were successful at Tribunal. She said her daughter had made this offer because they were so desperate to get the Trustee out of their lives.
MR DEREK HUGHES – THE APPLICANT
29. Mr Hughes whose statement of 28 April 2003 was before the Tribunal as Exhibit A3, told the Tribunal he had no intention of leaving his home. The arrangement about the house was a family agreement, he said. He said that he had no reservations about paying the whole mortgage as rent, and was happy with the way things were.
30. Mr Hughes said he had appealed the decision of ITSA because of his health problems. He said that to pay for his first treatment with Dr Holt, he used holiday pay, and for the second treatment he used sick leave he had owing to him. He thought that he now had approximately two and a half weeks of sick leave left, and four weeks of long service leave. He said that his income varied depending on the demand for his services even though his position was full-time.
31. Mr Hughes said that apart from his own work, he might help the girls with the odd fence. He said he had a medical examination scheduled for June 2003, and was concerned because his left eye is half closed, adding that if he failed the medical tests, he would only receive approximately $400 per week working in the yard at Midland Brick. If that happened, the girls would have to contribute he said.
32. In cross-examination Mr Hughes was referred to his pay slip for the period 1 April to 14 April 2003, and 18 March 2003 to 31 March 2003 (Exhibit R4). It was agreed that he had 2.4 weeks of annual leave, 6.2 weeks of long service leave and 1.3 weeks of sick leave remaining.
33. The Tribunal noted from Exhibit R6 that Mr Hughes had agreed to pay $150 per fortnight automatically deducted from his wages to pay off the debt of $10,902.69. Mr Hughes acknowledged that the Consent Order dated 21 August 2002 (Exhibit R5) indicated that he and his wife must pay costs of $4,000 incurred in the unsuccessful application to remove the Trustee.
CLOSING SUBMISSIONS
34. In order to come to the correct and preferable decision regarding whether the Tribunal could be reasonably satisfied on the evidence before it that the assessment of contribution payable to the Respondent should be varied as claimed by the Mr Hughes on the grounds of hardship pursuant to section 139T(2)(a) of the Act, the Tribunal had to take into account all the evidence, both written and oral, the submissions of the parties, and the case law and legislation.
the applicant
35. In considering the submissions of the Applicant, the Tribunal noted that Mrs Hughes emphasised that hardship due to ill health was the basis of their appeal. The agreement to pay rent of $390 per week had been entered into with the daughters before Mrs Hughes’ husband became ill. Mr Hughes was happy living in his own home and had enough to deal with given the inevitability of a further treatment by Dr Holt, Mrs Hughes submitted. Mrs Hughes explained other specialists had explained the risks and side effects of surgery, chemotherapy and radiotherapy, and they considered that the youth of these specialists meant that the treatment by Dr Holt was a better option at this stage.
36. Mrs Hughes also submitted that following her own surgery there would be costs associated with ongoing treatment such as physiotherapy.
37. She also said that her daughter Christine’s business was not doing well.
38. Mrs Hughes said the original debt had only been $24,000 and Mr Holbrook’s fees were over $50,000. The family wanted to stay together in the family home and to do so they had to pay the rent to cover the mortgage. Given Mr Hughes’ unpredictable health, they should not be forced to move because they could not afford the contribution of $150 per fortnight, she submitted.
the respondent
39. Mr Carey made submissions on behalf of the Respondent and summarised the situation as follows:
· The time period in question had been accepted by the parties as the financial year ending June 2003.
· $6,902.68 was still owed.
· Mr and Mrs Hughes had incurred $4,000 in costs awarded against them in their attempt to dismiss Mr Holbrook as Trustee.
· On 5 September 2002 Mr Hughes had agreed to repay $150 per fortnight.
· Mr Hughes sought a variation to this on the grounds of hardship, specifically his health problems, which was rejected by the Respondent on 17 March 2003.
· Throughout the majority of the relevant period Mr Hughes’ income had not been less than $1,000 per week. In that regard the Tribunal noted that the Respondent accepted gross earnings had for some of the period in question, been sustained by cashing in leave entitlements The Tribunal also noted that the Respondent has assumed an income of $1,402 per fortnight for the last 9 fortnights of the 2002/2003 financial year. (T3/8)
· In the view of the Respondent, the rental of $390 per week was exorbitant. The Respondent noted that Mr Hughes had accepted that effectively he was paying the mortgage, and the aim of that arrangement was to enable him, his wife and daughters to continue to reside in the family home.
· The adult daughters, owners of the property make no contribution to the mortgage or in the form of rent. Effectively the landlords (the daughters), and the tenants, (the parents), live together. Regardless of market rental, Mr and Mrs Hughes only require or at most utilise one third of the property. Within that third they can park the truck and accommodate their dogs in the house.
· Mr Carey submitted that the properties he had sourced on the Internet from Century 21 would easily accommodate Mr and Mrs Hughes, and in fact also their daughters at a much reduced rent.
· Mr Carey questioned the likelihood of the daughters invoking the residential tenancy provisions to force their parents to pay for advertising costs, cleaning and other costs if the necessity to move arose.
· The security system which benefited all, and for which approximately $1,000 had been paid, was a joint cost.
40. Mr Carey did not accept that the hardship required under section 139T had been established for the relevant period during which Mr and Mrs Hughes had been paying $150 per fortnight. Any hardship faced was due to the exorbitant rent and the failure of their adult and employed daughters to contribute, he submitted.
41. The health costs were a secondary issue. There was no evidence that there would necessarily be any medical costs before the end of the financial year as Mr Hughes was yet to see Dr Holt, and Mrs Hughes was not yet scheduled for surgery.
CONSIDERATIONS OF THE ISSUES
42. In reaching a decision the Tribunal had to determine whether Mr Hughes will suffer hardship pursuant to section 139T(2) of the Act if required to continue to pay the contribution of $150 per fortnight.
43. The Tribunal noted for the record that in assessing Mr Hughes’ ability to pay, the period in question was accepted by both parties as being the financial year ending 30 June 2003. Mr Hughes’ application to the Official Receiver dated 12 February 2003 (T4/10) refers to the contribution period May 2001 to 17 July 2002. This is the period of liability for which Mr Hughes agreed to pay $150 per fortnight to be deducted directly from his pay at Midland Brick from 17 August 2002 (Exhibit R6).
44. As to the claims that ill health and its associated costs should be taken into account in considering whether Mr Hughes suffers hardship in accordance with section 139T(2) of the Act; it was not in dispute, and the Tribunal accepted that Mr Hughes was diagnosed with a tumour in December 2002 for which he has had two treatments by Dr Holt. Notwithstanding, he has continued to work full-time using leave available when receiving treatments. If a further treatment is necessary, Mr Hughes has annual sick and long service leave totalling nearly 10 weeks available (Exhibit R4). The Tribunal accepted that if such treatment was considered necessary, and if Mr Hughes chose private treatment as offered by Dr Holt, he would face expenses of approximately $3,400. There may also, as in the past, be some additional costs.
45. The Tribunal noted that there was a possibility of future medical costs of an estimated $2,000 for Mrs Hughes related to surgery for her elbow.
46. No evidence was provided about income in relation to Mrs Hughes. However the Tribunal has taken the view that since her accident in 1998, she has not been able to contribute to the family income at the same level as previously. The Tribunal noted at T4/10 that Mr Hughes’ application to the Official Receiver dated 12 February 2003 was on the grounds of on-going medical expenses.
47. As to income issues, the Tribunal was satisfied that Mr Hughes is currently, and has for the majority of the period in question earned in the vicinity of $1,000 per week.
48. The Tribunal accepted the submissions of the Respondent that any hardship Mr and Mrs Hughes face is as a result of the way they have organised their financial affairs, paying exorbitant rent, and in any event, more rent than is necessary to house them adequately and to meet their needs. The Tribunal accepted that this is caused by the failure of their daughters to contribute, noting that both are able to work, and in Ms Beverley Hughes’ case earn a full-time salary, in addition to income from her Saturday job. The daughters should be able to contribute to their own accommodation costs notwithstanding they share the property with their parents. In addition, the Tribunal was satisfied from the evidence that at least two thirds of the property is for the use of the daughters and their horses.
49. The Tribunal did not need to reach a conclusion as to the actual rental value of the property, or whether a comparable property at a significantly lower rent could be found nearby. It accepted however that the rent paid by Mr and Mr Hughes which pays the entire mortgage has the result that both daughters pay neither rent back to their parents, the lessees of the entire property, nor a mortgage on the property in which all reside. Indeed, in the case of Christine, her business is also conducted from those premises. Nothing further was known about her income (apart from Mrs Hughes’ information that she is not receiving social security payments), because Ms Christine Hughes did not give oral or written evidence to the Tribunal.
50. The Tribunal accepted that Mr Hughes’ financial situation is stretched by the high cost of the rent he and his wife pay, and his costs of the private medical treatment he has chosen to undergo.
51. The Tribunal considered whether this could be described as hardship pursuant to the Act, noting that hardship is not defined by the Act. In Re Lumsden and SDSS (1986) 10 ALN N225 when discussing the meaning of “severe financial hardship”, the Tribunal stated at 926:
“…”Hardship” includes severe suffering ,extreme deprivation.”
52. The Macquarie Dictionary (2nd edition, 1995) defines hardship as “a condition that bears hard upon one: severe toil, trial, oppression or need”. There is no doubt Mr Hughes and his wife find themselves in a stressful situation. Mr Hughes has a medical condition that has an uncertain future. As yet he is able to work and has been able to fulfil his financial obligations to both the Trustee in bankruptcy and to pay a rate of rent that provides for himself, his wife and his two daughters at no cost to them. The mere fact of the bankruptcy would bring with it some degree of hardship. Mr and Mrs Hughes are still however living in their own home, and Mrs Hughes indicated that their daughters accepted that it still really belonged to them even though it had been transferred into their daughters’ names. Both they and their daughters agreed this was to keep the family home so they could all live together. The Tribunal had no reason to believe that this desire expressly repeated by Mr and Mrs Hughes and their daughter was in danger of changing in the near future.
53. The daughters, particularly Beverley, are in a position to contribute in some way to their own accommodation. Mr Hughes has met his past medical costs. The Tribunal, having considered all the evidence and Lumsden (supra), does not accept that any hardship Mr and Mrs Hughes have experienced, and may experience for the relevant period, is sufficient to satisfy the requirements of the Act. Accordingly Mr Hughes’ application fails.
DECISION
54. The Administrative Appeals Tribunal affirms the decision of the Insolvency and Trustee Service Australia (“ITSA”), dated 17 March 2003 rejecting the application to vary Mr Derek Hughes’ contribution payment on hardship grounds pursuant to section 139T(2)(a) of the Bankruptcy Act 1966.
I certify that the 54 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member and Ms Linda Savage Davis, Member.
Signed: ..............(sgd V Wong)..................................
AssociateDate/s of Hearing 8 May 2003
Date of Decision 30 May 2003
The Applicant Mr D Hughes - self represented
Solicitor for the Respondent Mr T Carey, Australian Government Solicitor
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