Pascoe and Inspector-General in Bankruptcy
[2006] AATA 252
•16 March 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 252
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2005/807
GENERAL ADMINISTRATIVE DIVISION ) Re
Scott Pascoe
Applicant
And
Inspector-General in Bankruptcy
Respondent
DECISION
Tribunal Ms N Isenberg, Member Date 16 March 2006
Place Sydney
Decision The Administrative Appeals Tribunal orders that Mr Hudson be joined as a party to the proceedings.
[Sgd] Ms N Isenberg, Member
CATCHWORDS
BANKRUPTCY – Application by the bankrupt in proceedings between his trustee and the Inspector General to be joined as a party – application granted.
LEGISLATION
Administrative Appeals Tribunal Act 1975 – section 30(1A)
Bankruptcy Act 1966 – section 149K and 149NCASELAW
Re Spinelly v Inspector-General in Bankruptcy (1997) 26 AAR 291
Melsom & Robson v Forrest, Spinelly & Spinelly, unreported 25 May 1996 (Federal Court)
Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No1) (1980) 3 ALD 74
Re Marine World Victoria Ltd and Minister for Arts, Heritage and Environment (1986) 10 ALD 262REASONS FOR DECISION
16 March 2006 Ms N Isenberg, Member BACKGROUND
1. The following is re-produced from the Respondent’s submissions and is not in dispute:
·On 21 January 2000 Mr Hudson was made bankrupt on his own petition. The Official Trustee became trustee of the bankrupt estate on that day. At a creditor’s meeting held on 8 November 2001 under the Bankruptcy Act it was resolved that the trustee of Mr Hudson’s estate be changed from the Official Trustee to Mr Scott Pascoe (the Applicant).
·On 7 February 2003 the Applicant issued a notice of objection to Mr Hudson’s discharge from bankruptcy. This notice of objection was filed with the Official Receiver on 11 February 2003: see s 149B(1) and see T3.
·On 22 April 2005 the Respondent made a decision to review the Applicant’s decision dated 7 February 2003 to object to Mr Hudson’s discharge from bankruptcy. The Respondent made this decision pursuant to section 149K(1)(a) of the Bankruptcy Act.
·The Respondent conveyed his decision to cancel the objection in a letter dated 30 May 2005 sent to Mr Hudson: see T20.
2. The substantive matter before the Tribunal is an application by Mr Pascoe as trustee of the bankrupt estate of Peter Hudson for review of a decision dated 30 May 2005 of the Respondent made under section 149N of the Bankruptcy Act1966 (“the Act”). That decision was to cancel an objection to Mr Hudson’s discharge from bankruptcy: see section 149N(1); see also section 149N(2) as to when that cancellation takes effect when there is an application to this Tribunal.
ISSUE BEFORE THIS TRIBUNAL
3. This is an application (“the application”) by Mr Hudson to be joined as a party to Administrative Appeals Tribunal (“the AAT”) proceedings under the provisions of section 30(1A) of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”).
THE HEARING
4. A hearing in relation to the joinder application was held on 13 February 2006 at which Mr Hudson appeared by conference telephone, Ms Nash appeared for Mr Pascoe and Mr Murray appeared for the Inspector-General.
5. Mr Hudson provided two bundles of documents and Mr Murray supplied written submissions. After the hearing and shortly prior to publication of this decision Mr Hudson supplied further documents, which I did not need to consider.
6. Ms Nash did not oppose the joinder of Mr Hudson.
CONSIDERATION OF THE EVIDENCE
7. The Tribunal’s power to join a party to proceedings before the Tribunal is contained in section 30(1A) of the AAT Act which provides as follows:
“Where an application has been made by a person to the Tribunal for a review of a decision, any other person whose interests are affected by the decision may apply, in writing, to the Tribunal to be made a party to the proceeding, and the Tribunal may, in its discretion, by order, make that person a party to the proceeding (Tribunal’s emphasis)”.
8. It was clear from the material he had submitted that Mr Hudson has significant issues in his relationship with Mr Pascoe. Mr Hudson was therefore reminded at the outset that only the narrow issue of his joinder to the proceedings was under consideration at this stage.
9. Mr Murray referred in his submissions to the scheme of administrative review in the Bankruptcy Act. He referred to the Inspector-General’s role of being the independent reviewer of decisions made by trustees. From that review an appeal lies to the AAT. The submissions of the Inspector-General in proceedings before the Tribunal, it was submitted, adequately cover a bankrupt’s interests. That is, joinder is not generally appropriate or necessary since the Inspector-General may be said to have the same or at least a parallel interest in the proceedings as the party seeking joinder.
10. I discussed with Mr Murray that the decision under review in the substantive matter (PT20/pg 99) was a letter written to Mr Hudson, about Mr Hudson’s bankruptcy. The final paragraph of the letter invites an application for review to this Tribunal. (That, I am informed, is the normal manner in which the Inspector-General would deal with an application under section 149K of the Act.) There is, in those circumstances, in my view, some irony in the position now taken by the Inspector-General in respect of Mr Hudson's application for joinder. Mr Murray, correctly, pointed out that in fact Mr Hudson was not dissatisfied with the decision under review. I observe, however, that if the Tribunal were to find in favour of the Applicant, then Mr Hudson would certainly be dissatisfied with the (possible final) outcome of the matter. He is certainly a person affected by the outcome. Ms Nash advised, however, of another objection which apparently has not yet been dealt with. It does not follow, therefore, that a successful outcome for the Inspector-General in the substantive proceedings necessarily results in Mr Hudson’s discharge from bankruptcy.
11. Mr Murray submitted that it is in the nature of bankruptcy matters before the AAT that there is always a third party whose interest is affected. He referred me to the decisions in Spinelly - Re Spinelly v Inspector-General in Bankruptcy (1997) 26 AAR 291 (AAT); Melsom & Robson v Forrest, Spinelly & Spinelly, unreported 25 May 1996 (Federal Court); upheld on appeal, 17 October 1996 (unreported, Black CJ, Lee and Carr JJ). The Full Court commented:
“We accept that there may not be total commonality of interest as between the Inspector-General and the trustees. [We refer to] the functions conferred on the Inspector-General by the Bankruptcy Act and the responsibilities which that Act places upon the Inspector-General. All of this must be set in the context of trustees here who are anxious to marshal and place before the Tribunal all evidence . . . the Deputy President did not err in the assumption which he expressed in the passage set out above . . . [or that] there was commonality of interest between the Inspector-General and the trustees.”
12. The history of the Spinelly matters was reviewed when the matter returned to the Tribunal for determination in 1997 (Re Spinelly v Inspector-General in Bankruptcy (1997) 26 AAR 291).
13. There are, however, some fundamental differences, in my view, in the present matter. Although it is trite to point out – in this matter the person seeking joinder is the bankrupt himself, whereas in Spinelly (supra), it was the trustees. While a trustee may have statutory and other obligations and thereby have an interest in the outcome in a particular bankruptcy matter, the bankrupt is critically affected by decisions about his bankruptcy. He is the “protagonist”, it could be said.
14. I therefore find that Mr Hudson is a person whose interests are affected by the decision under review.
15. In exercising the Tribunal’s discretion I note the decision of Davies J in Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No1) (1980) 3 ALD 74, particularly at 81, where his Honour said:
“While it will ordinarily be the duty of the Tribunal to make an order joining a party whose interests are affected by the decision under review, that duty is limited by the function which the Tribunal performs and by its duty to provide a fair hearing and to deal with the matter as expeditiously as the subject matter of the review permits.”
16. I also note the decision of Deputy President Thompson in Re Marine World Victoria Ltd and Minister for Arts, Heritage and Environment (1986) 10 ALD 262, at 271 where it was said:
“That discretion must, of course, be exercised rationally with regard paid to all of the circumstances of the proceeding and the nature of the interest of each of the persons applying to be made a party. It is necessary to have regard to the nature of review proceedings before the Administrative Appeals Tribunal…The increased cost of the proceeding to the applicant and respondent which will result from the joinder of additional parties in the proceedings is a factor to be taken into account…”
17. Mr Murray reminded me that even if I were to find that Mr Hudson’s interests were not adequately represented by the Inspector-General, his joinder should be considered in the light of the Tribunal’s obligation under section 33 of its Act, that is, to conduct proceedings with as little formality and technicality, and with as much expedition as possible.
18. Mr Murray submitted that to have Mr Hudson as a party would greatly protract the matter. In any event, Mr Murray, submitted, Mr Hudson had not demonstrated how he would be prejudiced if the Tribunal only had the Inspector-General’s response to Mr Pascoe’s application. He said that from Mr Hudson’s submissions, much of what Mr Hudson appears to want to say if allowed to join the proceedings, is not relevant. Even if that were the case, Mr Hudson responded, it was for the “judge” hearing the substantive issue to determine relevance. Only if he were a party would he have that opportunity to put his position, which, essentially was that Mr Pascoe has “no right to continue in [my] life”.
19. I discussed with the parties if either proposed to call Mr Hudson as a witness. Ms Nash indicated that further affidavits were to be filed in support of Mr Pascoe’s objection, which, she said, would indicate that the position her client had taken was justified. She thought the Inspector-General may wish to call Mr Hudson in response. Mr Murray was not necessarily of that view, given that there were, in his view, only straightforward legal issues to be determined. He indicated that, in any event, he would be likely to object to further evidence by the Applicant in the proceedings. From these discussions at the hearing it was by no means clear that Mr Hudson would be called as a witness in the matter.
20. Mr Murray acknowledged that Mr Hudson is “in dispute” with Mr Pascoe. He also confirmed that Mr Hudson is “in correspondence” with the Inspector-General. While full details were not available, and Mr Murray had no detailed instructions, it appears that the Inspector-General is being called upon to utilise its powers under section 149K of the Act in relation to the investigation of Mr Pascoe’s conduct. The outcome, at this stage, is unknown, and whether Mr Hudson will be satisfied with that outcome is also, necessarily, unknown. From the material available to me (eg T7) it appears though that Mr Hudson has been seeking the Inspector-General’s assistance since at least September 2004. Some of his correspondence (eg T8) demonstrates a level of frustration with progress. It is likely, in my view, although not articulated by Mr Hudson at the hearing, that he may lack confidence that the Inspector-General will adequately cover his interests.
21. Further, in Spinelly (supra) there appears to have been some detailed evidence as to the extent of communication between the Inspector-General and the trustees. When the matter had first been considered the Tribunal was satisfied “that the discussion and correspondence between the trustees, their solicitors and the Inspector-General’s representatives could not objectively be described as evidencing a co-operative attitude on the part of the Inspector-General at that time”. Later, by the time of the 1997 Tribunal’s consideration, there appears to have been a greater level of co-operation between the Inspector-General and the trustees. Although there was some mention of telephone discussions between Mr Murray and Mr Hudson, there was no evidence that would lead me to the view that arrangements have been made for Mr Hudson to “participate fully in the processes of the Tribunal”, as had been the case in Spinelly (supra).
22. For these reasons I find it appropriate to exercise the Tribunal’s discretion under section 30(1A) of the AAT Act.
DECISION
23. The Administrative Appeals Tribunal orders that Mr Hudson be joined as a party to the proceedings.
I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of MS N ISENBERG, MEMBER
Signed: Associate
Date of Hearing 13 February 2006
Date of Decision 16 March 2006
Representative for the Applicant Mr Nash
Representative for the Respondent Mr MurrayRepresentative of Joinder Mr Hudson (Self-Represented)
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