Makris, C. v Campbell, A.R.

[1994] FCA 616

CATCHWORDS

BAI(ARUPTCY - Overseas travel - whether s139ZU of Bankruptcy

Act governed bankrupt's application to travel overseas

- Review of contribution assessment -

effect of order of Administrative Appeals Tribunal staying the implementation of an order that a bankrupt pay a contribution to the trustee of the bankrupt estate - did order constitute a setting aaide of the challenged assessment or merely defer the tine for payment - did bankrupt remain a person liable to pay a contribution to the truatee - did s139ZU continue to govern the bankrupt's application to travel overseas.

- Overseas travel - bankrupt seeking permission of court to travel overseas under s139ZU on compassionate grounds as a consequence of deaths of uncles - compassionate ground only available with respect to a death of a close relative - uncle not within definition of close relative.

-	- and -	Applicant Respondent
O'Loughlin J. Adelaide

16 August 1994

URT OF AUSTRALIA )

A	I	L	A	R	T	S	U	A	)	)	No. SB 944 of 1992
-	1 1

CT OF THE S W

1 1

BETWEEN:

-

Applicant

- and -

Respondent

-	:	O'LOUGHLIN J.
:	ADELAIDE
Iumuuum	:	16 AUGUST 1994

8     -

Application dismissed with costs.

&&S:  Settlement and entry of order ie dealt with in

Bankruptcy Rule 124.

U 'miE F E D E R A L C O U R T

1

No. SB 944 of 1992

-	1
) 1
1

BETWEEN:

-

Applicant

- and -

P

Respondent

m:  08Loughlin J.

16 August 1994

This matter came before the court originally as an application by a bankrupt for leave pursuant to section 139ZU of the Bankruptcy Act 1966 ("the Act") to travel overseas. Subsection (1) of that section provides thatr

"A bankrupt who is liable to pay to the trustee a

contribution under section 139P(1) or 139Q(1) is not	entitled to leave Australia unless, on application
made by the bankrupt, the Court has made an order granting the bankrupt permission to leave Australi a.

When the matter came on for hearing, however, Mr Sulan QC, counsel for the bankrupt, explained that he now sought on behalf of the bankrupt to present an argument upon the premise that aection 139ZU had no application to the particular circumstances of this case and that the court should declare accordingly. His submission was to the effect that his client had ceased to be a person who is liable to pay to his trustee a contribution.

Mr Campbell, the trustee of the bankrupt estate, who appeared in person to oppose the original application, did not oppose the presentation of this new argument and the matter proceeded accordingly. Mr Sulan's argument was quite short and succinct but before identifying it, it is necessary to recite the relevant facts.

The estate of Constantinos Makris was sequestrated pursuant to an order of this court on 22 June 1990. Andrew Ryrie Campbell, the respondent to these proceedings, was appointed the trustee of his bankrupt estate. Acting under the provisions of division 4B of the Act, the trustee assessed the likely income that might be derived by the bankrupt in respect of the 1992/1993 financial year for the purpose of

determining whether the bankrupt should make a contribution	towards hi8 estate and, if so, the amount of that
contribution. The bankrupt's liability to make such a contribution is found initially in section 139P, although there is a power in the trustee to make a subsequent assessment in respect of the same period pursuant to section 1394.
The amount of the required contribution is to be ascertained by having regard to a formula that is set out in section 139s. By notice dated 19 February 1993, the trustee informed the bankrupt that the assessment of his contribution for. the-relevant contribution assessment period was $29,006. The relevant period was 1 July 1992 to 30 June 1993. The trustee required payment of a first instalment of $19,406 on 8 March 1993 and thereafter four equal instalments each of $2400 on the last working day of the months of March, April, May and June 1993.
Section 139ZA entitles a bankrupt to seek a review of the trustee's decision to make an assessment. Under that section the request for a review is directed to the Inspector-General, but he has power under section 139ZB to authorise an officer to exercise powers, including the abovementioned power of review. In this particular case Mr Makris sought a review of the Inspector-General, and the Inspector-General authorised the Official Receiver to act in the matter as the relevant
officer .
By letter dated 7 May 1993, the Official Receiver advised the bankrupt's solicitors that he had made a review of the trulrtee's contribution assessment and had reduced it from $29,006 to $25,221. The bankrupt, not being satisfied with the results of this review, applied to the Administrative Appeals Tribunal pursuant to the provisions of section 139ZF of the Act for a further review.
Before referring to the status of the proceedings in the Administrative Appeals Tribunal, it is appropriate now to refer to section 13926 of the Act. Subsection (1) of that aection states:

"Subject to subsection 1398I(3), a contribution that a person is liable to pay under subsection 139P(1) or 139Q(1) is payable at such time as the trustee deternines or, if the trustee pennits the contribution to be paid by instalments, at such tines and in such amounts as the trustee

determines."

Subsection (2) of section 13926 then provides:

"The liability of a person to pay a contribution under section 139P(1) or 139Q(1) is not affected by: (a) the making of an application by the person to the Official Receiver under subsection 139T(1); or (b) the making by the person of a regueat to the Inspector-General for a review of the decision of the trustee to make the assessment that gave rise to the liability; or (c) the making of an application to the Administrative Appeals Tribunal for review of the decision of the Inspector-General or of the decision of the trustee.

The next subsection of that section, subsection (3), then

refers to the question of payment and it provides that unpaid

contributions are recoverable by the trustee as debts due to	the estate of the bankrupt. Thus, subject to the argument
that has been advanced by Mr Sulan and which is set out hereunder, the present application before the Administrative Appeal Tribunal, which has not yet been finalised, does not affect the liability of the bankrupt to contribute to his estate in the sum of $25,221, nor the ability of his trustee to sue for its recovery.
However, on 22 June 1993 the Administrative Appeals Tribunal, on the application of the bankrupt, made an order in the nature of a stay that, so claimed Mr Sulan, had the effect of ,dischazging any liability that Mr Makris had or might have had to make any contributions to his estate. Furthermore, so the argument proceeded, Mr Makris would remain free of any much liability until, if at all, the Administrative Appeala Tribunal affirmed the decision of the Official Receiver or made an order for contribution of some other sum.
If this interpretation of the order of the Administrative Appeal8 Tribunal is correct, the very restrictive provisions of section 139ZU of the Act would not apply. Mr Makris would merely need to protect himself by seeking the permission in
general term from his trustee to travel overseas - see
paragraph 272(c). The power in the Administrative Appeal6 Tribunal to make the order of 22 June 1993 is found in aubmection 41(2) of the Administrative Appeals Tribunal Act
which, so far as i6 material, empowers the tribunal to:

*...make such order or orders s tay ing o r otherwise a f f e c t i n g the operation or fnplmentatfon o f the decis ion t o which the relevant proceedings r e l a t e s . "

The language of the subsection was picked up by the bankrupt in hi6 application to the Administrative Appeal6 Tribunal in that he requested that:

"Such order or orders be made s tay ing o r otherwise a f f e c t i n g the operat i on o r h p l m e n t a t i on o f the

deci si on t o which the relevant proceeding r e l a t e s . "

The Adminietrative Appeale Tribunal, in its order of 22 June 1993, also directed its attention to the implementation of the decision as dietinct from the decision. Its order, so far as relevant, was in these terms:

"...that the implementation of the decision of the official receiver dated 7 May 1993 be stayed until such tfines as the application for review before this tribunal dated 31 May 1993 is finally determined."

In support of hie argument, Mr Sulan referred to a line of authority in the Administrative Appeals Tribunal that dealt with the cancellation of tax agents' registrations. It seems that it is conrmon practice for the tribunal to stay the cancellation or suepension of licenses so that the tax agent can continue hie busineee pending the determination by the tribunal of his application for review. Such decieione are both understandable and acceptable but they do not assist Mr Sulanvs argument. Nor do I consider that the treatment by the tribunal of cancelled peneions or allowances pending review is

of assistance.

This argument must be resolved by having regard to the relevant legislation and the meaning of the word "stay", according to ordinary precepts. The usual order for a stay ie one that stops or stays:

"The further conduct of the proceedings so that the parties are precluded thereafter from taking any further step in the proceeding. "

(Halsburys Laws of England, 4th Ed. volume 37 at paragraph

437).

In its ordinary sense, a stay does not constitute a setting aside or a reversal of the challenged decision. It merely operates to prevent a party enforcing the decision pending. a. further determination, by a court or other reviewing

body. Such an interpretation, in fact, accords with the

language of section 41 of the Administrative Appeals Tribunal Act and the order of the tribunal of 22 June 1993, both of which refer to a stay of the implementation of a decision.

In my opinion the interpretation advanced by Mr Sulan cannot be sustained. I have come to the conclusion that Mr Ilakris remains a person who is a bankrupt liable to pay to his trustee a contribution. Ae such he is a person to whom aection 139XU applielr. He cannot leave Australia without the permission of the court. His application to the Administrative Appeals Tribunal has not relieved him of his liability to pay the contributions as assessed by the Official Receiver on behalf of the Inspector-General. That liability

deferred as a consequence of the stay order. The sum of	remains unaffected, but payment of the assessed amount is	$25,221 is, at this stage, a debt that is due by the bankrupt
to hi6 estate but it is not yet payable. The subject of
payment and the amount of payment will both be dependent upon the outcome of the proceedings in the tribunal.

It is now conceded that the bankrupt cannot invoke the

am~istance of the court under section 139ZU. He had commenced proceedings seeking permission on compassionate grounds to attend memorial services in Greece for two deceased uncles. The provisions of sub-paragraph 139ZU(Z)(a)(ii) were thought to be appropriate. They are -to the effect that a court is not to grant permission unless it is satisfied that it is appropriate, for compassionate reasons relating to the death or serious illness of a cloae relative of the bankrupt, to allow the bankrupt to leave Australia.

However, the term "close relative" is a defined term and in section S(1) of the Act it is limited to a spouse, de facto spouse, parent, child, brother, sister, half-brother, or half- sister of the relevant person. It does not extend to uncles. There being no other provision in the section to which the bankrupt may turn for assistance, this application must be dismissed, with costs.

I certify that this and the
7 preceding pages are a
true copy of the Reasons

for Judgment of Mr. Justice

O'Loughlin.

Counsel for the Applicant I Mr J Sulan QC and Mr R
Comazetto

Solicitors for the Applicant :  Phillips Fox

Trustee	I	Mr A R Campbell
Hearing Dates	I	16 August 1994