Kay and Inspector-General in Bankruptcy - [2024] AATA 2064

Kay and Inspector-General in Bankruptcy [2024] AATA 2064 (26 June 2024)
Division:GENERAL DIVISION
File Number(s): 2023/1544
Re:GREGORY STEVEN KAY
APPLICANT

INSPECTOR-GENERAL IN BANKRUPTCYAnd
RESPONDENT

DECISION
Tribunal:Mr Robert Reitano, Member
Date:26 June 2024
Place:Sydney

I affirm the Inspector-General in Bankruptcy’s decision on 13 February 2023 not to amend Gregory Stephen Kay’s statement of affairs filing date recorded in the in the National Personal Insolvency Index.
.......................[sgd].................................................
Mr Robert Reitano, Member
CATCHWORDS
BANKRUPTCY – National Personal Insolvency Index – correction – inaccurate or misleading – sending by ordinary post – filing – no evidence of receiving – date of discharge from bankruptcy – unsatisfactory evidence - decision affirmed
LEGISLATION
Bankruptcy Act 1966 (Cth)
Bankruptcy Regulation 2021 (Cth)
CASES
Sofia and Anor v. Pattison and Anor[1997] FCA 1586
James v Inspector-General (2019) AATA 5171
REASONS FOR DECISION
Mr Robert Reitano, Member

The very confined issue in this case is whether the National Personal Insolvency Index (Index) should be corrected because it is inaccurate or misleading in so far as it records Mr Gregory Steven Kay (Mr Kay) as having filed his Statement of Affairs (SOA) under section 54 of the Bankruptcy Act 1966 (Cth) (Act) on 24 June 2019.
I have reviewed the decision and have decided to affirm the Inspector-General in Bankruptcy’s decision on 13 February 2023 not to amend Mr Kay’s SOA filing date as recorded in the in the Index. The following are my reasons for that decision.
Before dealing with the reasons I should record that as the Senior Member who presided over the hearing is not able to finalise a decision in this matter, on 24 June 2024 at a directions hearing both parties consented to me making a decision in the matter based on the evidence and information led at the hearing and a review of the transcript and the audio-visual recording of the hearing.
REGULATORY FRAMEWORK
The regulatory framework is straightforward so far as it concerns the issues in this matter. The starting point is sub-section 54(1) of the Act which requires that where a sequestration order is made the person to whom the order is directed must within 14 days of being notified complete and file a SOA with the Official Receiver and provide a copy to the trustee.
A number of sections of the Act demonstrate that it is the actual filing by providing a document that is important. Sub-section 54(4) is an example of such a provision because it permits a creditor to inspect a SOA that has been filed and seek a copy of it, so that if the document has not in fact been provided it cannot be inspected. Section 57B of the Act provides that the Official Receiver must accept or refuse to accept the SOA within 14 days from the date upon which it is filed. That cannot be done unless the document is actually received by the Official Receiver.
Section 149 of the Act provides that a bankrupt who has been made…

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: [2024] AATA 2064
Decision Date: 26 June 2024

CaseChat Overview and Summary

This matter concerned an appeal by Mr Gregory Stephen Kay against a decision of the Inspector-General in Bankruptcy. The dispute centred on the correct filing date of Mr Kay's Statement of Affairs (SOA) for the purposes of his bankruptcy, which had commenced on 17 April 2014. The Inspector-General had refused to amend the recorded filing date in the National Personal Insolvency Index, leading to Mr Kay's appeal to the Tribunal.

The primary legal issue before the Tribunal was to determine the date on which Mr Kay's SOA was deemed to have been received by the relevant authority, specifically in light of Regulation 103 of the Bankruptcy Regulations. This regulation stipulated that a document is taken to be received, filed, or lodged only when it is actually received by the Inspector-General or the Official Receiver. The Tribunal also had to consider the evidence presented regarding the posting of the SOA and whether it met the requirements for deemed receipt.

The Tribunal affirmed the Inspector-General's decision, finding that the evidence presented by Ms Kay, Mr Kay's wife, regarding the posting of the SOA in December 2015 was unsatisfactory. While Ms Kay stated she posted the SOAs with postage stamps at an Oxenford post office in December 2015, her evidence was inconsistent with earlier statements, including an application to the Tribunal which suggested a filing date of December 2014. Crucially, Regulation 103(3) requires actual receipt of the document, and there was no evidence that the SOAs were actually received by the Inspector-General or the Official Receiver. The Tribunal noted that any belief by Mr or Ms Kay that the SOA had been lodged was irrelevant to the determination of the filing date under the Act and Regulations.

Orders

Orders of the court

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Background

Background to the litigation

Regulation 103 provides:(1) Unless the contrary intention appears, this section applies if a document is required or permitted by the Act or this instrument to be given or sent to, or filed or lodged with:(a) the Inspector - General; or(b) the Official Receiver; or(c) the Official Trustee.(2) The document must be posted, delivered, sent by email, or sent through the website of the Australian Financial Security Authority, to:(a) in the case of a document for the Inspector - General--the office of the Inspector - General; or(b) in the case of a document for the Official Receiver--the office of the Official Receiver; or(c) in the case of a document for the Official Trustee--the office of the Official Receiver.(3) If this section applies, the document is taken to be received, filed or lodged only when the document (or, where applicable, a copy of it) is actually received by, or on behalf of, the Inspector - General or the Official Receiver (as the case requires).BACKGROUND Like the regulatory background the facts relevant to this matter are reasonably straightforward. On 17 April 2014, Mr Kay and his wife, Sue Maree Kay (Ms Kay), were made bankrupt when a sequestration order was made on the petition of a bank. From then until 30 November 2015 there was correspondence and phone calls between Ms Kay and representatives of the Australian Financial Securities Authority (AFSA) concerning the need for Mr Kay, and Ms Kay, to lodge a SOA. The details of those communications are not all that important although one or two of the things that were said are worth noting. On 29 May 2014 Ms Kay told an officer of AFSA, amongst other things, something to the effect that ‘regarding the Statement of Affairs and that there is a lot in there to be filled in and that it is taking longer than she anticipated to get it filled in and sent in’ and that ‘she is going to try and get her Statement of Affairs as well as her husbands in early next week.’ It is only necessary to note that on Ms Kay’s version of what happened when questioned in the Tribunal nothing happened ‘early next week’ or as things now turn out according to Ms Kay some 18 months later. Ms Kay was unable to explain why that was the case. On 30 November 2015 an enforcement officer from AFSA wrote to Ms Kay advising her of her obligation to file an SOA. The letter outlined the reasons why the SOA needed to be filed, in particular because discharge from bankruptcy would date three years from the date of filing. The letter enclosed two SOA forms one of which was to be returned to a particular address. The terms of the letter did not say that a pre-stamped addressed envelopes were enclosed, but apparently one was enclosed. Ms Kay said in her evidence that she posted her and Mr Kay’s SOA in December 2015 by leaving an envelope with postage stamps on it at a post office in Oxenford on the Gold Coast. She said she remembered it was December because she posted some gift cards to her grandchildren’s parents so they could buy Christmas gifts for her grandchildren. Although Ms Kay was emphatic that those things happened in December 2015 when she was questioned about it in the Tribunal, that position had not always been the case: the Application Mr Kay made to the Tribunal had suggested the date was December 2014 and I refer to some of the other things that suggest it was not always so clear in a moment.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

For completeness I should add that I have not found it necessary to consider any argument reliant upon section 33A as it is clear that the power in that section is reposed in a court and not in the Tribunal. It is irrelevant to the Tribunals determination of the matter that Mr Kay or Ms Kay may have believed on reasonable grounds that they had lodged the SOA.DECISION I affirm the Inspector-General in Bankruptcy’s decision on 13 February 2023 not to amend Gregory Stephen Kay’s statement of affairs filing date recorded in the in the National Personal Insolvency Index

Ratio Decidendi

Legal Principle Established

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