Perez and Inspector-General in Bankruptcy - [2024] AATA 3277

Perez and Inspector-General in Bankruptcy [2024] AATA 3277 (11 September 2024)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2023/5888
Re:Narciso Perez
APPLICANT

AndInspector-General in Bankruptcy
RESPONDENT

DECISION
Tribunal:Senior Member Diana Benk
Date:11 September 2024
Place:Sydney

The Tribunal affirms the decision under review pursuant to section 43(1)(a) of the Administrative Appeals Tribunal Act 1975 (Cth).
...................[SGD]....................
Senior Member Diana Benk
CATCHWORDS
BANKRUPTCY – whether trustee was entitled to issue a notice of objection - statutory powers of trustee – special ground of objection – if trustee excused the bankrupt – whether the bankrupt had reasonable excuse for non-compliance with the trustee’s statutory power – decision affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Bankruptcy Act 1966 (Cth)
Electronic Transactions Act 1999 (Cth)
CASES
Mulhern v Pearce (No.2) [2014] FCA 805
Neffati and Inspector-General in Bankruptcy [2016] AATA 941
Nguyen v Pattison [2004] FMCA 517
Rimanic and Inspector-General in Bankruptcy [2008] AATA 307
SECONDARY MATERIALS
Explanatory Memorandum, Bankruptcy Legislation Amendment Bill 2002 (Cth)
REASONS FOR DECISION
Senior Member Diana Benk
Background

The matter has a protracted history. The Applicant was officially declared bankrupt on 4 December 2019. In the ordinary course of events, automatic discharge from bankruptcy would have occurred on 5 December 2022 (being three years and one day after the filing of his statement of affairs). However, the trustee objected to discharge on the basis the Applicant failed to comply with information requests.
The records show the trustee sent the Applicant letters on 1 December 2021 and 24 January 2022, requesting income particulars which particularised what information was required, timeframes for compliance, and consequences for failing to comply.
It is undisputed the Applicant did not respond to the letters, resulting in the trustee lodging a notice of objection to the bankruptcy on 23 November 2022, which had the impact of extending the bankruptcy for a further five years. The Applicant objected, maintaining he had not received the communications sent by the trustee and so was blindsided by the decision. In any event, he has since complied, and so the trustee should take this into account.
A review of this decision was sought. The Respondent refused to change the decision maintaining that a ‘special ground’ of objection had been established and further that the Applicant did not have ‘a reasonable excuse’ for his conduct.
The Applicant now seeks review by the Tribunal and requests that it set aside the decision, as he can establish a ‘reasonable excuse’ for not responding to the notices issued by the trustee. He has obtained and relies on an ‘expert opinion’ supporting his position that the letters sent via email by the trustee were never received. He also contends that the absence of a ‘read receipt’ is sufficient to render the Respondent’s position invalid. The Applicant also maintains that he has now provided the trustee with all of the information sought in the notices and this should be sufficient to set aside the decision.
The matter underwent the usual case management pathway…

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 3277
Decision Date: 11 September 2024

CaseChat Overview and Summary

This matter concerned an appeal by Mr. Perez against a decision of the Inspector-General in Bankruptcy. The dispute centred on whether the trustee was entitled to issue a notice of objection to Mr. Perez's discharge from bankruptcy. The appeal was heard by Senior Member Diana Benk.

The primary legal issues before the court were whether the trustee possessed the statutory power to issue the notice of objection, and if so, whether Mr. Perez had a reasonable excuse for failing to comply with the trustee's statutory powers. The court was required to consider the scope of the trustee's powers and the circumstances under which a bankrupt might be excused for non-compliance.

Senior Member Benk affirmed the decision of the Inspector-General. The reasoning applied focused on the statutory framework governing bankruptcy and the trustee's obligations and powers thereunder. The court found that the trustee had acted within their statutory authority in issuing the notice of objection. Furthermore, it was determined that Mr. Perez had not established a reasonable excuse for his non-compliance with the trustee's lawful directions.

Orders