John Davey and Australian Electoral Commission John Bell OTHER PARTY Paul Morgan OTHER PARTY
[2014] AATA 355
[2014] AATA 355
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/3923
Re
John Davey
APPLICANT
And
Australian Electoral Commission
RESPONDENT
And
John Bell
OTHER PARTY
And
Paul Morgan
OTHER PARTY
DECISION
Tribunal Deputy President J W Constance
Date 5 June 2014 Place Melbourne The application made 12 August 2013 in this matter seeking review of the decision of the Electoral Commission made 10 August 2013 is dismissed.
........................[sgd]................................................
Deputy President J W Constance
CATCHWORDS
ELECTORAL – registered officer – whether application stayed by reason of applicant being declared bankrupt – effect of trustee failing to elect to prosecute or discontinue application - application for substitution as applicant – application for review of decision dismissed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 27A, 29, 33, 42A
Bankruptcy Act 1966 (Cth) s 60
Commonwealth Electoral Act 1918 (Cth) s 134
CASES
Duckworth v Water Corporation [2012] WASC 30
Grimsley and Telstra Corporation Limited [2010] AATA 106
John v Neiman Holdings Pty Ltd (1986) 84 FLR 84
Re Lofthouse (2001) 107 FCR 151Re Singh and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 720
SECONDARY MATERIALS
Dennis Pearce, Administrative Appeals Tribunal (LexisNexis Butterworths, 3rd ed, 2013)
REASONS FOR DECISION
Deputy President J W Constance
5 June 2014
INTRODUCTION
Mr Davey is a member of a registered political party, The Australian Democrats. In recent years disputes have arisen between groups within the party as to its administration.
The Commonwealth Electoral Act 1918 (Cth) requires a party to lodge with the respondent Commission notice of the details of its “registered officer”, a statutory position which the Act requires the party to appoint. Amongst the powers given to the registered officer is the power to endorse party candidates for an election.
Section 134 of the Act enables a political party to request the Commission to change the details of its “registered officer”. If there is a dispute within the party as to the proper person to occupy the position, the Commission is required to consider the evidence available to it and decide whether it should make a change to the details of the registered officer if it is requested to do so.
On 10 August 2013 the Commission decided to refuse an application lodged by Mr Davey and others to change the name and details of the registered officer from Mr Bell to Mr Morgan. On 12 August 2013, in accordance with the Act, Mr Davey applied for a review of the decision by this Tribunal. Subsequently Mr Bell and Mr Morgan were made parties to the application. The application has not been heard and decided by the Tribunal.
On 27 February 2014 a sequestration order was made against the estate of Mr Davey in accordance with the Bankruptcy Act 1966 (Cth).
On 3 March 2014 Mr Hayden Ostrom Brown, another member of the party, applied to be substituted as the applicant in place of Mr Davey. Mr Davey supports the application of Mr Ostrom Brown.
On 14 March 2014 Mr Davey gave notice of this application to the trustee of his bankrupt estate.
The trustee did not make an election to prosecute or to discontinue the application within 28 days of receiving the notice.
LEGISLATIVE BACKGROUND
Subsection 60(2) of the Bankruptcy Act 1966 (Cth) provides:
An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes an election, in writing, to prosecute or discontinue the action.
Subsection 60 (3) provides:
If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
Subsection 60(4) provides:
Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, and action commenced by him or her before he or she became a bankrupt in respect of:
(a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or
(b) the death of his or her spouse or de facto partner or of a member of his or her family.
Subsection 60(5) provides:
In this section, action means any civil proceeding, whether at law or in equity.
[original emphasis]
ISSUES FOR DETERMINATION
The following issues arise for determination:
(1)Was this application stayed by reason of Mr Davey being declared bankrupt?
(2)If so, what is the effect of the trustee’s failure to elect to either prosecute or discontinue the application?
CONSIDERATION
Issue 1: Was this application stayed by reason of Mr Davey being declared bankrupt?
In Re Singh and Secretary, Department of Education, Employment and Workplace Relations[1] Deputy President Forgie gave detailed consideration to the question whether an application to this Tribunal is a “civil proceeding, whether at law or in equity” and therefore an “action” for the purposes of section 60 of the Bankruptcy Act. The Deputy President decided that it was as:
On its ordinary meanings, …, a “civil proceeding” is an action relating to the rights and duties and the like of an individual and not to whether an individual has transgressed the acceptable norms of behaviour as determined according to the criminal law.[2]
[1] [2010] AATA 720.
[2] [2010] AATA 720, [39].
I respectfully adopt the reasoning of Deputy President Forgie on this question. I am satisfied that this application is an “action” within the meaning of section 60(5) of the Bankruptcy Act. However there has been some doubt raised as to whether this conclusion determines the issue under consideration.
Turning to the wording of subsection 60(2) and applying the ordinary meaning of those words, I conclude that, as Mr Davey became bankrupt after commencing this application, the application was stayed from the date of his bankruptcy, being 27 February 2014. This conclusion follows from the interpretation of the word “action” to include an application to this Tribunal.
In reaching this conclusion I regret that I am unable to follow the further reasoning of Deputy President Forgie in the matter of Singh to which I have referred. In further detailed reasoning the Deputy President decided that section 60(2) did not stay an application to the Tribunal if the application does not have a connection with the bankrupt’s property vested in the trustee. In Mr Singh’s case his application for a Newstart allowance had no such connection as any payment of this allowance was not property available to the creditors.
I cannot agree with the conclusion of Deputy President Forgie in this regard for several reasons. In so deciding I have considered the principle that it is preferable that there be consistency in Tribunal decision-making.
First, once it has been determined that an “action” includes an application to this Tribunal, the ordinary meaning of the words used in subsection 60(2) is clear. As was said by the Supreme Court of Western Australia in Duckworth v Water Corporation: [3]
…the Deputy President construed s 60(2) as if it included the words in [square brackets]: ‘an action [which is connected with property of the bankrupt vested in the trustee] commenced by a person who subsequently becomes a bankrupt is … stayed’”.
In my view there is no ambiguity in the words of the subsection and therefore there is no justification for departing from the ordinary meaning of the words used.
[3] [2012] WASC 30, [52].
Secondly, subsection 60(4) specifically provides exceptional circumstances in which a bankrupt may continue an action after he or she has been declared bankrupt. Had Parliament intended to exempt proceedings in which the bankrupt had no beneficial interest in the property in issue in the subject proceedings it could simply have said so.
Thirdly, the Tribunal is bound to follow a decision of the Federal Court of Australia which deals with the issue in question unless it can be distinguished from the fact situation before the Tribunal. In his text, Administrative Appeals Tribunal (3rd ed), Emeritus Professor Dennis Pearce wrote:
The AAT is part of the administrative structure of government. Therefore, despite the undoubted legal expertise of its members, it is bound to adhere to relevant judicial pronouncements in the same way as is a government agency. The AAT should not decline to follow a judicial pronouncement on the meaning of an Act merely because it does not agree with it. French J in Federal Commissioner of Taxation v Salenger (1988) 19 FCR 378; 81 ALR 25 summarised the position at 387; 34:
… it is difficult to see how it is open to a senior member to form the view that a decision of the Supreme Court of a State which is on the very point before the tribunal is incorrect and not to be followed. In the special case of conflicting decisions of superior courts, the tribunal may have to decide which to follow, but that occasion does not arise here. Ordinarily, senior members of the tribunal should apply the law as stated by the judges of this court or by judges of the Supreme Courts of the States.
It seems that the same reasoning should apply also to presidential members.[4]
[4] Para. 9.40, p.253.
In Re Lofthouse[5] the Federal Court held that proceedings commenced by a bare trustee in relation to property in which he had no beneficial interest were stayed by the operation of subsection 60(2).[6]
[5] (2001) 107 FCR 151.
[6] In Duckworth v Water Corporation (supra) the Supreme Court of Western Australia considered the judgement in Re Lofthouse and the Tribunal’s decision in Singh and Secretary, Department of Education and Workplace Relations and concluded that the principles applied in Re Lofthouse were correct.
Mr Davey’s application does not relate to any form of property, rather it seeks a review of a decision to register a change in the position of Registered Officer of a political party. However as it was held in Re Lofthouse that a beneficial interest in property was not necessary for the section to apply, there does not appear to be any reason why the same principle should not apply where the bankrupt has no interest in property at all. Again, to interpret subsection 60(2) to exclude its application to the matter before me would be to read into the subsection qualifications which are not justified.
Issue 2: What is the effect of the trustee’s failure to elect to either prosecute or discontinue the action?
It is not in dispute that Mr Davey’s trustee did not make the election referred to in subsection 60(3). In these circumstances, in accordance with subsection 60(3), he is deemed to have abandoned the action.
The Administrative Appeals Tribunal Act 1975 (Cth) makes no express provision as to what is to happen when an action is “abandoned”. Section 42A provides for a deemed dismissal of an application when an applicant discontinues or withdraws an application, but this section is only enlivened when the discontinuance or withdrawal is notified in writing.
It appears that the Tribunal has two options once it is satisfied that an application has been abandoned in accordance with subsection 60(3) of the Bankruptcy Act.
The Tribunal can exercise the power to make directions given by section 33 of the Act and immediately dismiss the application. The Tribunal has previously relied on this section to dismiss applications.[7]
[7] See, for example, the decision of Deputy President Hack in Grimsley and Telstra Corporation Limited [2010] AATA 106.
Alternatively the Tribunal could allow a reasonable time to pass and then dismiss the application under subsection 42A(5) which provides, in part:
If an applicant for review of a decision fails within a reasonable time:
(a) to proceed with the application;
…
the Tribunal may dismiss the application without proceeding to review the decision.
In these circumstances, in my view, a reasonable time could be approximately seven days.
It was argued on behalf of Mr Ostrom Brown that it would be unfair to the parties joined if the application was dismissed without resolution and that they, or one of them, should be enabled to prosecute the application, or alternatively he should be substituted as the applicant.
It is important to note that Mr Davey is the only applicant in these proceedings. This is not a case where there is more than one prosecuting party. In the latter circumstances I can see no reason why another applicant could not proceed even though the trustee of one applicant has been deemed to have abandoned his or her application.
There is no doubt that other parties will be inconvenienced by this application having been abandoned. However this is a recognised consequence of the operation of section 60. In John v Neiman Holdings Pty Ltd,[8] Young J. said:
… the effect of s 60(2) is to prevent any activity in litigation in which the bankrupt is a plaintiff or one of the plaintiffs until the election has been made. This will doubtless cause hardship in many cases: ... but the Commonwealth Government must be taken to have formed the policy that it is better for some hardship to be caused to some litigants in the public interest of the trustee in bankruptcy making an informed decision as to whether in the interest of creditors he will pursue the action in which the bankrupt is involved or not.
[8] (1986) 84 FLR 84, 86.
From 27 February 2014, when Mr Davey was declared bankrupt, the application was stayed. As the trustee did not make an election to prosecute or discontinue the application the stay continued to operate and Mr Ostrom Brown’s application to be substituted as the applicant could not be dealt with. This was the situation when the 28 days from the bankruptcy elapsed and the trustee was deemed to have abandoned the application.
This does not mean that no one other than Mr Davey can seek to have the Commission’s decision not to change the details of the Registered Officer reviewed. A person whose interests are affected by the decision may apply to the Tribunal for review.[9] Depending on when the person received notice of the decision an extension of time in which the applicant may make the application may be required.[10]
[9] Administrative Appeals Tribunal Act 1975 (Cth) s 27A.
[10] Section 29.
CONCLUSION
In accordance with section 33 of the Administrative Appeals Tribunal Act (Cth), the application made 12 August 2013 in this matter seeking review of the decision of the Electoral Commission made 10 August 2013 will be dismissed.
I certify that the preceding 34 (thirty -four) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance ............................[sgd]............................................
Associate
Dated 5 June 2014
Date(s) of hearing 27 March 2014 Applicant Mr J Davey Counsel for the Respondent Mr L Brown Solicitors for the Respondent Australian Government Solicitor Counsel for the first-named
Other PartyMs N Papaleo Solicitors for the first-named Other Party
Aitken Partners
Advocate for the second-named Other Party
Mr J Davey
2
6
0