James and Inspector-General in Bankruptcy - [2019] AATA 5171

James and Inspector-General in Bankruptcy [2019] AATA 5171 (3 December 2019)
Division:TAXATION AND COMMERCIAL DIVISION
File Number: 2019/0265
Re:John Edward James
APPLICANT

AndInspector-General in Bankruptcy
RESPONDENT

DECISION
Tribunal:Member D K Grigg
Date:3 December 2019
Place:Brisbane

The Tribunal affirms the decision under review.
..........................[SGD]..............................................
Member D K Grigg
CATCHWORDS
BANKRUPTCY – extent of scope and power to amend National Personal Insolvency Index – whether statement of affairs filed with official receiver – whether trustee validly appointed – whether trustee agent of official receiver –– decision under review affirmed.
LEGISLATION
Acts Interpretation Act 1901 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth)
Bankruptcy Act 1966 (Cth)
Bankruptcy Regulations 1996 (Cth)
CASES
Barbaro v Minister for Immigration and Ethnic Affairs [1982] FCA 141; (1982) 44 ALR 690
Cable v Pattison [2003] FCA 1499
Casey v Repatriation Commission (1995) 39 ALD 34
Jovanovski v Official Receiver, Australian Financial Security Authority [2018] FCCA 1193
Klinger v Nicholl [2005] FCAFC 153
Military Rehabilitation and Compensation Commission v May [2016] HCA 19
Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; (2006) 228 CLR 529
O’Brien v Sheahan [2005] FCAFC 59
Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Purden Pty Limited v Registrar of Bankruptcy (1982) 43 ALR 512
Re Owen Rowland Hill and Official Receiver [2007] AATA 1420
Re Saverio Barbaro and Minister for Immigration and Ethnic Affairs (1980) 3 ALD 1
Shi v Migration Agents Registration Authority [2008] HCA 31
Shulver v Sherry (1992) 28 ALD 570
Sofia and Anor v. Pattison and Anor [1997] FCA 1586
Soong and Inspector General in bankruptcy [2014] AATA 372
Trihakis v Official Receiver (Vic) [1999] FCA 1426
REASONS FOR DECISION
Member D K Grigg
3 December 2019
BACKGROUND AND CLAIM HISTORY

On 17 January 2008 the Federal Magistrates Court (as it was then known) made a sequestration order[1] against the estate of Mr John James. The sequestration order provided that the date of the act of Mr James’ bankruptcy was 15 August 2007.[2]
[1] A sequestration order is an order made when a debtor has committed an act of bankruptcy: Bankruptcy Act 1966 (Cth), section 43.
[2] Exhibit 1, T Documents, T5, page 55, Sequestration Order dated 17 January 2008.
Pursuant to section 43(2) of the Bankruptcy Act 1966 (Cth) (“the Act”), when a sequestration order has been made, the debtor, in this case Mr James, becomes a bankrupt, and continues to be a bankrupt until:
(a)he or she is discharged;[3] or
(b)his or her bankruptcy is annulled.[4]
[3] By force of subsection 149(1) of the Act.
[4] By force of subsection 74(1) or 153A(1) or under section 153B of the Act.
When a person becomes bankrupt their name is entered onto the National Personal Insolvency Index (“NPII”) pursuant to regulation 13.03 of the Bankruptcy Regulations 1996 (“Regulations”).
Mr Christopher Palmer, of O’Brien Palmer Chartered Accountants and Insolvency Practitioners, was made trustee of Mr…

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: [2019] AATA 5171
Decision Date: 3 December 2019

CaseChat Overview and Summary

This matter concerned an appeal by Mr James against a decision of the Inspector-General in Bankruptcy regarding the amendment of information recorded on the National Personal Insolvency Index (NPII). Mr James sought to have the NPII amended to reflect that he was no longer an undischarged bankrupt and that he had filed his Statement of Affairs (SOA) by 30 June 2008, rather than the recorded date of 24 October 2018. The Inspector-General contended that the NPII accurately reflected the lodgement of the SOA and that Mr James had not been discharged from bankruptcy.

The Administrative Appeals Tribunal (AAT) was required to determine whether the information recorded on the NPII concerning Mr James' bankruptcy was inaccurate or misleading, and if so, whether there was a basis for its amendment. Specifically, the Tribunal had to consider the Inspector-General's arguments that Mr James had failed to file his SOA with the Official Receiver as required by section 54 of the relevant Act, that posting the SOA to a trustee did not constitute filing with the Official Receiver, and that the NPII correctly recorded the filing date and Mr James' undischarged bankrupt status.

The Tribunal affirmed the Inspector-General's decision, reasoning that the power to amend the NPII is derived from regulation 13.04 of the Bankruptcy Regulations, which permits correction only if the information is inaccurate or misleading. Applying the principle that the AAT stands in the shoes of the original decision-maker and hears matters de novo, the Tribunal found that the NPII accurately recorded the date Mr James filed his SOA and that he remained an undischarged bankrupt. The Tribunal concluded that the information on the NPII was neither inaccurate nor misleading, and therefore, there was no basis for amendment under regulation 13.04.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Davies J in Re Saverio Barbaro and Minister for Immigration and Ethnic Affairs (1980) 3 ALD 1 explained the process the Tribunal should engage in in admitting and assessing evidence as follows:In informing itself on any matter in such manner as it thinks appropriate, the Tribunal endeavours to be fair to the parties. It endeavours not to put the parties to unnecessary expense and may admit into evidence evidentiary material of a logically probative nature notwithstanding that that material is not the best evidence of the matter which it tends to prove. But the Tribunal does not lightly receive into evidence challenged evidentiary material concerning a matter of importance of which there is or should be better evidence. And the requirement of a hearing and the provision of a right to appear and be represented carries with it an implication that, so far as is possible and consistent with the function of the Tribunal, a party should be given the opportunity of testing prejudicial evidentiary material tendered against him. It is generally appropriate that a party should have an opportunity to do more than give evidence to the contrary of the evidence adduced on behalf of the other party. He should be given an opportunity to test the evidence tendered against him provided that the testing of the evidence seems appropriate in the circumstances and does not conflict with the obligation laid upon the Tribunal to proceed with as little formality and technicality and with as much expedition as the matter before the Tribunal permits. It is not in every case fair to all parties or otherwise appropriate that the Tribunal should insist upon the best evidence of disputed facts, even critical facts. There are occasions when it is inappropriate to insist upon such evidence and when it is appropriate to receive evidence which, though of a logically probative nature, cannot be tested by one or more of the parties. In such a case, the party adversely affected by the evidence is given a fair hearing by his attendance at the hearing, his awareness of the evidence adduced against him and his ability to adduce evidence to the contrary if he sees fit to do so. The fair hearing in this instance takes account of the function of the Tribunal including the fact that it is an administrative tribunal and not a court of law. As an administrative tribunal, it has the duty to review an administrative decision and to exercise the decision-making power. It is necessary that the nature of the procedures adopted at the hearing and the nature of the evidence which is received by the Tribunal be adapted to the function which it performs (at 5). …We are concerned here with the exercise of an administrative discretion and it seems to me that having regard to that I should take into account documents which I think are genuinely relevant and, which are documents to which I should have regard. And I think that once I do that and give an opportunity to the applicant to meet by evidence whatever matters that he thinks are adversely raised against him in those documents I do the best that sensibly can be done.(emphasis added)

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The Full Federal Court in Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99 said at 106:When reviewing an administrative decision under s 43(1) the AAT stands in the place and is empowered to exercise all of the relevant powers and discretions, of the decision-maker in respect of the decision under review. The AAT hears the matter de novo in the light of the evidence placed before it.(emphasis added) The power given to the Inspector-General to amend the NPII derives from regulation 13.04 which provides relevantly:Application for certain information not to be on the Index(1)Subject to subregulation (4), a person who is a debtor or bankrupt may apply in writing to the Inspector-General for information in respect of the person:(a) not to be entered on the Index, on the ground that the entry of the information would jeopardise, or be likely to jeopardise, the person's safety; or(b) on the Index to be removed on the ground that:(i)its inclusion jeopardises, or is likely to jeopardise, the person's safety; or(ii) it is inaccurate or misleading; or(c) on the Index to be corrected on the ground that it is inaccurate or misleading.Note: Under subregulation (4), an application cannot be made for the removal of information in respect of a person's name or date of birth.(2)The application must specify the ground relied and contain, or have with it, full particulars in support of the ground.Example: A person may rely on a court order (such as a domestic violence order) to show that publication of the information in question would jeopardise, or be likely to jeopardise, the person's safety.(3)The Inspector-General must, without delay:(a) decide an application; and(b) give notice in writing to the applicant of:(i) the decision and the reasons for it; and(ii)the applicant's right, if aggrieved by the decision, to apply under regulation 13.05 to the Administrative Appeals Tribunal for review of the decision.(4)An application or a decision must not be made under this regulation to remove from the Index any of the following items of information in respect of a person:(a) the person's name;(b) the person's date of birth. The grounds upon which the power can be exercised to correct the NPII record are limited to the circumstances set out in regulation 13.04.[25] Regulation 13.03(6)(b) also requires the Official Receiver to correct an entry in the NPII without delay if the entry contains information that is out of date, inaccurate or misleading.[25] David Ian Mansfield as Trustee of the Bankrupt Estate of Maria Fokasv Maria Fokas [2018] NSWSC 249, at [18]. The issue here is whether the information regarding Mr James recorded on the NPII is inaccurate or misleading. The NPII currently records that Mr James is an undischarged bankrupt and that he filed his SOA on 24 October 2018. Mr James requests that the NPII be amended to record that he is no longer an undischarged bankrupt and that he filed his SOA on a date no later than 30 June 2008. The Respondent contends that the information on the NPII regarding Mr James’ lodgement of his SOA is neither incorrect, inaccurate nor misleading.

Ratio Decidendi

Legal Principle Established

The Inspector General contends that:(a)pursuant to section 54 of the Act, Mr James was obliged to file his SOA with the Official Receiver which he did not do;(b)even if, as Mr James contends, he posted the SOA to the Trustee, it never arrived at the Trustee’s office and hence was never lodged with the Official Receiver;(c)whether Mr James provided his SOA to Mr Palmer is irrelevant;(d)the mere posting of an SOA cannot satisfy a person’s obligation to “file” with the Official Receiver his SOA;(e)Mr James did not file an SOA with the Official Receiver until 24 October 2018;(f)the NPII correctly records the filing of the SOA on 24 October 2018 and the fact that Mr James has not been discharged from bankruptcy;(g)there is nothing inaccurate or misleading in the NPII regarding Mr James bankruptcy within the meaning of regulation 13.04(1)(c) of the Regulations;(h)there is no basis upon which the NPII could be amended; and(i)Mr James’ contention that he had a reasonable belief that his SOA had been filed is of no relevance to the decision of the Inspector-General or the Tribunal and is only relevant to an application to a “Court” pursuant to section 33A of the Act.CONSIDERATIONPower to Amend the NPII Schedule 8 to the Regulations, headed “Information on the National Personal Insolvency Index”, specifies the information that is to be recorded on the NPII. Item 3 of Schedule 8 specifically states that the date on which an SOA is filed is required to be included pursuant to regulation 13.03. Pursuant to section 43(1) of the AAT Act, the AAT has the power to affirm, vary, set aside, make a decision in substitution of, or remit a decision under review. In Shi v Migration Agents Registration Authority [2008] HCA 31, Keifel J, as her Honour then was, explained the role of the Tribunal as follows (citations omitted):[134] Section 43(1) expresses clearly that the Tribunal may exercise all of the powers and discretions conferred upon the original decision-maker. The Tribunal has been said to stand in the shoes of the original decision-maker, for the purpose of its review. In Minister for Immigration and Ethnic Affairs v Pochi Smithers J said that, in reaching a decision on review of a decision of the original decision-maker, the Tribunal should consider itself as though it were performing the function of that administrator in accordance with the law as it applied to that person.(my emphasis) The Full Federal Court in Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99 said at 106:When reviewing an administrative decision under s 43(1) the AAT stands in the place and is empowered to exercise all of the relevant powers and discretions, of the decision-maker in respect of the decision under review. The AAT hears the matter de novo in the light of the evidence placed before it.(emphasis added) The power given to the Inspector-General to amend the NPII derives from regulation 13.04 which provides relevantly:Application for certain information not to be on the Index(1)Subject to subregulation (4), a person who is a debtor or bankrupt may apply in writing to the Inspector-General for information in respect of the person:(a) not to be entered on the Index, on the ground that the entry of the information would jeopardise, or be likely to jeopardise, the person's safety; or(b) on the Index to be removed on the ground that:(i)its inclusion jeopardises, or is likely to jeopardise, the person's safety; or(ii) it is inaccurate or misleading; or(c) on the Index to be corrected on the ground that it is inaccurate or misleading.Note: Under subregulation (4), an application cannot be made for the removal of information in respect of a person's name or date of birth.(2)The application must specify the ground relied and contain, or have with it, full particulars in support of the ground.Example: A person may rely on a court order (such as a domestic violence order) to show that publication of the information in question would jeopardise, or be likely to jeopardise, the person's safety.(3)The Inspector-General must, without delay:(a) decide an application; and(b) give notice in writing to the applicant of:(i) the decision and the reasons for it; and(ii)the applicant's right, if aggrieved by the decision, to apply under regulation 13.05 to the Administrative Appeals Tribunal for review of the decision.(4)An application or a decision must not be made under this regulation to remove from the Index any of the following items of information in respect of a person:(a) the person's name;(b) the person's date of birth.