Petrenko and Australian Financial Security Authority - [2024] AATA 448

Petrenko and Australian Financial Security Authority [2024] AATA 448 (15 March 2024)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2021/2828
Re:Yulia Petrenko
APPLICANT

Australian Financial Security AuthorityAnd
RESPONDENT

DECISION
Tribunal:Senior Member Dr N A Manetta
Date:15 March 2024
Place:Adelaide

The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the following directions:
(1)The Committee should allow Ms Petrenko the opportunity to provide updated figures in respect of her ‘relevant employment’ at a senior level for the five years preceding the date of my decision (or any other convenient date decided upon by the Committee);
(2)The Committee should allow Ms Petrenko the opportunity to provide further references and any other further information that she wishes in support of her application; and
(3)The Committee must take into account the fact that Ms Petrenko passed the oral examination the Tribunal administered, and it must then decide in light of all the material before it whether a further examination is needed (bearing in mind especially the Tribunal’s comments about the limitations of the examination the Tribunal administered). If it decides a further examination would assist it, it must administer a written examination, not an oral examination.

......................[sgnd].................................................
Senior Member Dr N A Manetta

BANKRUPTCY – application to be registered as a trustee in bankruptcy – committee found applicant did not have requisite capacity to act as registered trustee under the Bankruptcy Act 1966 (Cth) – applicant failed to pass oral examination – number of hours of ‘relevant employment’ – relatively few hours involving private bankruptcy work – Tribunal asked to administer further oral examination – applicant passed Tribunal examination – Tribunal not satisfied applicant has requisite capacity – observations on whether Tribunal should have been asked to administer oral examination – decision set aside and matter remitted for reconsideration
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Bankruptcy Act 1966 (Cth)
CASES
Esber v The Commonwealth (1992) 174 CLR 430
Frugtniet v ASIC [2019] HCA 16; (2019) 266 CLR 250; (2019) 79 AAR 9
Re Mansfield and A Committee convened under section 20-10 of the Insolvency Practice Schedule (Corporations) [2018] AATA 1510
SECONDARY MATERIALS
Insolvency Practice Rules (Bankruptcy) 2016 (Cth)
REASONS FOR DECISION
Senior Member Dr N A Manetta
15 March 2024

This is an application by Ms Yulia Petrenko seeking a review of a decision of a certain committee convened pursuant to section 20-10 of Schedule 2 of the Bankruptcy Act 1966 (Cth) (‘the Committee’ and ‘the Act’). By its decision, dated 9 April 2021, the Committee declined Ms Petrenko’s application to become a registered trustee in bankruptcy under the Act. She seeks a review of that decision in this Tribunal.[1] She asks the Tribunal to set aside the Committee’s decision and to find her eligible to be registered as a trustee in bankruptcy. At the hearing before me, Ms Walker appeared for Ms Petrenko; Mr Douglas, for the respondent.
[1] Pursuant to section 96-1 of Schedule 2 to the Act.
COMMITTEE’S DECISION
Ms Petrenko’s application for registration was refused by the Committee because they found, in essence, that she had not passed an oral examination they administered as part of the mandatory interview process required under the Act. In their view, she had not thereby demonstrated a capacity to perform the duties and functions of a registered trustee under the Act.
That was the principal issue between the parties before me. The parties asked the Tribunal, in exercise of its de novo jurisdiction, to administer a further oral examination.
The Committee also raised doubts about whether Ms Petrenko had satisfied a further requirement; namely, that she should have undertaken at least 4,000 hours of ‘relevant employment’ in the five years immediately preceding her application. The Committee referred in this connection to the ‘small portion of her employment experience in personal insolvency administrations’.[2] It concluded, however, that this should not be a sufficient reason to reject her application.
[2] Hearing Book (‘HB’), 10-11.
This parties agreed before me that Ms Petrenko did have at least 4,000 hours of ‘relevant employment’ immediately before her application. As part of my review, I have considered that joint position, and offered my own conclusions in respect of it.
The relevant regulatory framework is set out below.[3]
[3] At [13]ff.
PRE-HEARING DIRECTIONS IN RELATION TO A FURTHER ORAL EXAMINATION
Certain pre-hearing directions were made by another member of the Tribunal on 19 September 2023. These directions appear to have been made by consent. They envisaged that the Tribunal would administer a further oral examination at the hearing. The examination would be of the same type that Ms Petrenko had undertaken, but was found to have failed.
I raised my misgivings about the appropriateness of this approach at the outset of the hearing before me. I decided, however, to administer the examination because it had been agreed between the parties in advance, and the parties were quite clear that they wished to proceed in that manner. I shall return to the question of the appropriateness of the Tribunal being asked to administer examinations towards the end of these reasons.
ORAL EXAMINATION ADMINISTERED BY THE TRIBUNAL
It is convenient at this point to describe the oral examination I administered. It mirrored the Committee’s examination. Ms Petrenko was given a lengthy list of questions some 40 minutes before the commencement of the examination proper. I did not draft the questions or have any say in their content: they were supplied by the respondent. Ms Petrenko studied them for the allotted reading time and was allowed to make written notes. She then undertook the oral examination.
The examination consisted of my asking Ms Petrenko the questions one by one over a lengthy period – some three and half hours including a 45-minute lunch break. Her answers were transcribed. She was permitted to consult the notes she had made in the allotted reading time and, indeed, any other material she had chosen to have to hand to assist her when she gave her responses.
I further note that I asked the questions in the hearing room from the bench with both counsel present. The questions were answered by Ms Petrenko from the witness box, although she was not sworn at that time. On occasion and to ensure fairness, Mr Douglas asked supplementary questions of his own to ensure utmost fairness to Ms Petrenko. For my own part, I did not ask supplementary questions, and I allowed Ms Petrenko whatever time she wanted to answer the questions, because one of the complaints Ms Petrenko has made about the conduct of the examination before the Committee is that they interrupted her unduly and did not give her sufficient time to answer.
I should add that after the examination, Ms Petrenko gave sworn evidence to the Tribunal and was cross-examined. The parties made final submissions on whether Ms Petrenko had passed or failed the oral examination in light of certain model answers that had been given to me, and there were other submissions made in respect of Ms Petrenko’s eligibility to be registered under the Act.
REGULATORY BACKGROUND
I now explain the essentials of the regulatory background. Schedule 2 of the Act is entitled Insolvency Practice Schedule (Bankruptcy) (‘the Schedule’). Section 20-5(1) of the Schedule permits an individual to apply to the Inspector-General in Bankruptcy to be registered as a trustee. The Inspector-General is entrusted with the general administration of the Act: see section 11(2)(a) of the Act.
Section 20-10 of the Schedule permits the Inspector-General to convene a committee of three persons, including himself or herself, to consider the application. He or she must refer an application for registration as a trustee to a committee within two months of receiving it: see section 20-15 of the Schedule.
Section 20-20 of the Schedule concerns the duties and responsibilities of a committee to which an application for registration as a trustee is referred. It is in the following terms:
20‑20 Committee to consider applications
Committee must consider referred applications
(1)If an application for registration as a trustee is referred to a committee, the committee must consider the application.
(2)     For the purposes of considering the application, the committee:
(a)        must interview the applicant; and
(b)        may require the applicant to sit for an exam.
Decision of committee
(3)    Within 45 business days after interviewing the applicant, the committee must decide whether the applicant should be registered as a trustee or not.
(4)     The committee must decide that the applicant should be registered as a trustee if it is satisfied that the applicant:
(a)        has the qualifications, experience, knowledge and abilities prescribed; and
(b)        will take out:
(i)         adequate and appropriate professional indemnity insurance; and
(ii)        adequate and appropriate fidelity insurance;
against the liabilities that the applicant may incur working as a registered trustee; and
(c)         has not been convicted, within 10 years before making the application, of an offence involving fraud or dishonesty; and
(d)        is not, and has not been within 10 years before making the application, an insolvent under administration; and
(e)        has not had his or her registration as a trustee under this Act cancelled within 10 years before making the application, other than in response to a written request by the applicant to have the registration cancelled; and
(f)         has not had his or her registration as a liquidator under the Corporations Act 2001 cancelled within 10 years before making the application, other than in response to a written request by the applicant to have the registration cancelled; and
(g) is not disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001, or under a law of an external Territory or a law of a foreign country; and
(h)        is otherwise a fit and proper person; and
(i)          is resident in Australia or in another prescribed country.
(5)   The committee may decide that the applicant should be registered even if the committee is not satisfied of a matter mentioned in paragraph (4)(a), (e), (f) or (i), provided the applicant would be suitable to be registered as a trustee.
Registration may be subject to conditions
(6)     The committee may decide that the applicant’s registration is to be subject to any conditions specified by the committee.
Spent convictions
(7)     Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.
Note:    Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.
Section 20-25 requires a committee to give to the applicant and the Inspector-General a report setting out its decision. The report in this case was before me.[4]
[4] HB, 7ff.
Section 20-20(4)(a) of the Schedule refers to the ‘qualifications, experience, knowledge and abilities prescribed’. ‘Prescribed’ refers to prescriptions in the Insolvency Practice Rules (Bankruptcy) 2016 (’the Rules’): see section 5-5 of the Schedule.
Section 20-1 of the Rules is currently in the following terms:
20‑1 Qualifications, experience, knowledge and abilities required by applicants for registration
(1)        This section is made for the purposes of paragraph 20‑20(4)(a) of the Insolvency Practice Schedule (Bankruptcy).
(2)        A committee to which an application for registration as a trustee is referred under section 20‑15 of the Insolvency Practice Schedule (Bankruptcy) must be satisfied that the applicant has each of the following qualifications, experience, knowledge and abilities:
(a)        the applicant has completed the academic requirements for the award of a tertiary qualification that includes at least 3 years of full‑time study (or its equivalent) in commercial law and accounting;
(b)        the applicant has completed the academic requirements for at least 2 course units accredited under the Australian Qualifications Framework Level 8 (or equivalent study) in the practice of external administrators of companies, receivers, receivers and managers, and trustees under the Act;
(c)         during the 5 years immediately preceding the day on which the application is made, the applicant has been engaged in at least 4,000 hours of relevant employment at senior level;
(d)        the applicant has demonstrated the capacity to perform satisfactorily the functions and duties of a registered trustee;
(e)        the applicant is able to satisfy any conditions to be imposed under the Insolvency Practice Schedule (Bankruptcy), if the applicant is registered as a trustee.
(3)        For the purposes of paragraph (2)(c), relevant employment must include:
(a)        employment that involves any of the following:
(i) assisting a registered trustee in the performance of the registered trustee’s duties as trustee under the Act;
(ii) providing advice in relation to matters under the Act; and
(b)        employment that provides direct or indirect exposure to any of the following:
(i) the external administration of companies, receivership or receivership and management;
(ii) the restructuring of companies or the giving of advice in relation to the restructuring of companies.
In the Hearing Book prepared by the parties,[5] I had an older version of the Rules, the one in force as at the date of the committee’s decision some years ago, and the parties addressed me on that older version. The latest version of the Rules is quoted above, and I believe I should apply it in my de novo review. The older version differs mainly in respect of subsection (3). Subsection (3) of the older version reads as follows:
(3) In this section:
relevant employment in relation to an applicant, means employment that:
(a) involves assisting a registered trustee in the performance of his or her duties as trustee under the Act;
(b) involves the providing of advice in relation to matters under the Act; and
(c) provides exposure to the external administration of companies and receivership and receivership and management.
It does not seem to me, however, that subsection (3) offers a more favourable outcome to Ms Petrenko and I shall refer to the latest version.[6]
[5] Ibid, 657.
[6] Had it been more favourable to Ms Petrenko in some respect, the older provision might have remained applicable in my review, given the decision of the High Court in Esber v The Commonwealth (1992) 174 CLR 430. That issue does not arise for consideration, however.
I note the terms of paragraph (d) in section 20-1(2) of the Rules. The Rules should merely set out ‘qualifications, experience, knowledge and abilities’ that are intended to be prescribed for the purposes of section 20-20(4)(a) of the Schedule. I query whether an applicant having ‘demonstrated the capacity to perform satisfactorily the functions and duties of a registered trustee’ answers the description of a ‘qualification’, or of ‘experience’, ‘knowledge’ or an ‘ability’.
The Tribunal is not, generally speaking, an appropriate forum to litigate questions of invalidity, however; and no such question was raised in any event. Accordingly, I shall apply the stipulated criterion.
The Rules no longer offer a formal definition of ‘relevant employment’ in section 20-1(3) of the Rules as such.[7] There is, however, an elaboration of what it must ‘include’. Relevant employment must ‘include’ employment that ‘involves’ one of two things, and it must include employment that ‘provides exposure to’ a third. The employment in which the applicant must be ‘involved’ is specified to be: either ‘assisting a registered trustee in the performance of the registered trustee’s duties under the Act’ or ‘providing advice in relation to matters under the Act’. The employment to which the applicant must have either direct or indirect exposure is: either ‘the external administration of companies, receivership or receivership and management’, or the ‘restructuring of companies or the giving of advice in relation to the restructuring of companies’. I shall refer to this latter category as simply ‘exposure to corporate administration or restructuring’.
[7] The older version does explicitly offer a definition.
The Tribunal has decided in the past that the concept of ‘providing exposure to’ differs from the concept of ‘involving’.[8] That must be true. The change in wording (from ‘involves’ to ‘providing direct or indirect exposure to’) is deliberate and was clearly intended to signal a change in meaning. ‘Providing direct or indirect exposure’ is a far more general concept than ‘involves’. It is only necessary that the employment should provide ‘exposure to’ corporate administration or restructuring rather than entail any formal role in assisting those who are registered as corporate liquidators or administrators or in providing advice to them.
[8] See Re Mansfield and A Committee convened under section 20-10 of the Insolvency Practice Schedule (Corporations) [2018] AATA 1510.
The reason for requiring exposure to corporate administration or restructuring presumably arises from the fact that a trustee’s administration of a bankrupt’s estate may intersect with, or be affected by, the liquidation or administration of a corporate entity. Ms Petrenko confirmed this in her oral evidence; and she also confirmed that the rules governing corporate insolvencies and those governing personal bankruptcies differed from one another, although they are also similar in some respects. I take it that it was judged necessary that an applicant should have had some ‘exposure to’ the regime governing corporate administration and restructuring in order to perform competently as a registered trustee.
APPLICANT’S EXPERIENCE AND QUALIFICATIONS
I now turn to summarise Ms Petrenko’s experience and qualifications. I need only do so briefly as the parties are agreed that the only issues I am concerned with in this review arise from section 20-1(2)(c) and (d) of the Rules.
Ms Petrenko was born overseas in 1988. Among her qualifications are a Bachelor of Economics with Command of Foreign Languages, a Master of Accounting and Performance Management and a Graduate Diploma of Chartered Accounting. She has also completed the Insolvency Education Program conducted by ARITA.[9] This is said by her to qualify as two course units accredited under the Australian Qualifications Framework Level 8.[10]
[9] The Australian Restructuring Insolvency & Turnaround Association.
[10] HB, 462.
Ms Petrenko gives her employment history as follows.[11] In about December 2010, she commenced full-time work with BRI Ferrier (SA) Pty Ltd as an Intermediate Level 1 employee (the second rung of four amongst junior staff). On 1 March 2014, Ms Petrenko began work at a managerial level (just underneath partner level) with Worrells Solvency and Forensic Accountants (SA) Pty Ltd (‘Worrells SA’). I understand from her statement that Worrells is a national practice and its South Australian arm was set up by Mr Nick Cooper (now Ms Petrenko’s husband) and her. Mr Dominic Cantone joined Worrells SA as a manager on 1 July 2015. He became a partner at Worrells SA in 2018.
[11] Ibid, 466ff.
On 1 September 2020, Oracle Insolvency Services was established by Ms Petrenko, Mr Cooper and Mr Cantone. It is an incorporated practice operating through a unit trust. Ms Petrenko and her husband, Mr Cooper, have a 65% holding while Mr Cantone holds 35%.

I am satisfied that Ms Petrenko has maintained appropriate professional memberships, and I do not need to detail these.
Ms Petrenko’s relevant employment hours immediately before her application
Ms Petrenko filed her application for registration as a trustee in bankruptcy on 9 November 2020.[12] She submitted a summary of her employment experience for the period from 1 April 2015 to 1 April 2020 in support of her application. Her statement records that she had worked the following hours in that period: 817 hours in personal insolvency (i.e, bankruptcy matters regulated by the Act) and 3,199 hours in corporate insolvency matters. This made for a total of 4,016 hours.[13] These figures included chargeable hours only and did not include other non-chargeable hours devoted to work in respect of personal insolvencies,[14] but there is no estimate in her statement of how many more hours there might be.
[12] Ibid, 20.
[13] Ibid, 471.
[14] Ibid, 472.
I note that this five-year period does not immediately precede the day on which Ms Petrenko’s application was made as required by section 20-2(c) of the Rules. On the face of matters, the application did not evidence 4,000 hours of relevant employment in the five months immediately preceding the application. The committee was, however, specifically empowered to dispense with this requirement.[15]
[15] See section 20-20(5) of the Schedule.
One further question that arises is whether the 4,016 hours submitted by Ms Petrenko, even if they had covered the period of five years immediately preceding her application, would have amounted to at least 4,000 hours of ‘relevant employment’. In this connection, I return to the Committee’s stated concern that relatively few hours (817 only) entailed bankruptcy work, while far more involved corporate administration or restructuring.
Both Ms Walker and Mr Douglas submitted that provided there are 4,000 hours, it does not matter that the hours may include, as they do in this case, relatively few hours of work ‘involving’ bankruptcy matters under the Act and an overwhelmingly greater number of hours devoted to work which provided ‘exposure to’ corporate administration or restructuring.[16]
[16] These submissions were made in relation to the older version of the Rules, but there does not appear to be a relevantly material difference between the two versions.
I have decided that I should accept this submission, which was jointly made, but with qualifications. I now explain my reasons for this conclusion.
I accept that Ms Petrenko has satisfied the requirement that her employment should expose her to corporate administration or restructuring. I accept also that it is not necessary that Ms Petrenko should have gained that exposure through involvement in bankruptcy files. If that were the requirement, it could lead to the undesirable result that a registered liquidator, seeking registration as a trustee in bankruptcy, would not be assessed as having had exposure to corporate insolvency unless it arose in his or her work assisting trustees in personal bankruptcy. That could not have been intended, I believe. It would lead to an absurd result where an application from a registered liquidator to become a registered trustee could be assessed as defective because of a lack of exposure to corporate administration or restructuring.
This implies to my mind that it was envisaged that a candidate might not be involved in bankruptcy work for all of the stipulated 4,000 hours. That said, it is nevertheless necessary that Ms Petrenko should have been engaged in relevant employment that ‘includes’ work that ‘involves’ assisting registered trustees or providing advice in relation to matters arising under the Act.
Ms Walker submitted that Ms Petrenko had this experience. Ms Walker submitted, in effect, that ‘involves’ – I bear in mind she was addressing the older version – means in this context ‘includes to whatever degree’. I accept that Ms Walker’s suggested interpretation, which was also Mr Douglas’s position, is literally open. One dictionary definition of the word ‘involves’ is, in effect, ‘includes to whatever degree’. One can say, quite idiomatically, that a job ‘involves little travel’, for example.
But in the interpretation of any statutory provision, it is important to bear in mind context and the consequences of an interpretation. The purpose of prescribing a figure of at least 4,000 hours of ‘relevant employment’ in the preceding five years is to ensure that applicants for registration have sufficient and substantial practical experience behind them and that their experience is relatively recent. Ms Walker accepted in argument that the logical consequence of her submission was as follows: a mere 200 hours of work on bankruptcy files over five years could be combined with 3,800 hours of work on other files in which there was merely an exposure to corporate administration or restructuring. In that circumstance, the requirement of ‘at least 4,000 hours’ would still be met.
It is hard to see, however, that such a result was intended. The provision refers to a figure of ‘at least 4,000 hours’ of ‘relevant experience’ and at ‘a senior level’. There need only be ‘exposure to’ corporate administration or restructuring. If one thinks of one year as the equivalent of approximately 46 five-day working weeks (after four weeks of annual leave and, say, 10 public holidays are accounted for), the minimum of 4,000 hours translates to the equivalent of 17.39 hours per week, every week of 46 weeks, for each of the preceding five years. The figure of 17.39 hours equates to approximately one half of a working week of 35 hours. These are rough figures, of course, but they demonstrate the point that the minimum-number-of-hours requirement at a senior level was intended to stipulate a serious commitment over a number of years. This is to be expected since what is sought under the Act is registration as a trustee, a highly responsible position.
All in all, I doubt that it could have been intended that an applicant for registration could have very little experience at all of personal bankruptcy files and still have met the relevant paragraph’s work-experience requirements. The context does not, in my opinion, support an interpretation that permits any number of hours of work on bankruptcy files to suffice, no matter how few.
I would not agree with the submission, therefore, that there is no implied minimum of hours.
That said, while only 817 hours were put forward as work that involves bankruptcy files prior to the application (that is, approximately twenty percent of the 4,000-hour minimum), this number of hours is not trivial. I have decided that had Ms Petrenko’s 4,016 hours’ experience (including the 817 hours’ bankruptcy experience) been gained in the five years immediately before she lodged her application, she would have had at least 4,000 hours of ‘relevant employment’ at a senior level, and would have satisfied section 20-2(c) of the Rules.
I am comforted in this view by the fact that Mr Douglas did not take the point that Ms Petrenko did not have 4,000 hours of ‘relevant employment’. If there had been an intention behind the Rules that some higher number of hours should involve direct involvement in bankruptcy files, that submission would have been made on behalf of the respondent. The wording of the provision is something that should be addressed when the Rules are next revised, however. Greater specificity would help here.
I accept, however, Mr Douglas’s submission that the number of hours actually worked on bankruptcy files is relevant to the question of an applicant having demonstrated his or her capacity to perform the duties and functions of a registered trustee.
ORAL EXAMINATIONS
Before the Committee
I now turn to consider the question of whether Ms Petrenko has demonstrated the capacity to perform satisfactorily the functions and duties of a registered trustee. The Committee decided that she had not done so and relied on the results of the oral examination that it administered.
There are a number of things I would say about the oral examination. First, an oral examination of this type is, in my opinion, undesirable, and the Committee’s practice in this regard should be discontinued.
The Committee was specifically empowered to require Ms Petrenko ‘to sit for an exam’: see section 20-20(2)(b) of the Schedule. This clearly permitted the Committee to require Ms Petrenko to sit for a written examination. The oral examination the Committee administered was two-and-a-half hours long. An oral examination of that length is too long to be fair, in my opinion. A written examination of this length would have been fairer, and more transparent, since the answers would have been given in writing and, therefore, remain as an objectively verifiable record. Written responses customarily receive marks or points with a ‘pass’ being set at a predetermined point threshold. Oral answers tend to be graded on a more impressionistic basis.[17] A written paper allows candidates to come back to questions that might be challenging the candidate. Written answers can be revised and a wrong or incomplete answer corrected during the examination period, which is also fairer. The candidate also has time to reflect, and generally has a better opportunity to consult materials the candidate is entitled to bring into the examination room.
[17] Indeed, the respondent asked me to assess Ms Petrenko’s performance in the oral examination I administered on an ‘impressionistic basis’.
Moreover, a candidate undertaking a written examination is not required to answer additional questions that may interrupt thought processes. I appreciate that a committee, when asking supplementary questions in an oral examination, may well be attempting to assist the candidate to give a better or more complete answer; but the candidate may view these supplementary questions as unduly intrusive and disruptive. That was Ms Petrenko’s perception in this case, for example.
Finally, and importantly, a written paper also allows for appropriately searching questions to be asked in my opinion. An oral examination does not really allow for this, at least not to the same degree. All in all, oral examinations should not be used by committees in my opinion.
Examination before me
This leaves me to decide what I should make of the oral examination that I was asked to conduct. I bear in mind that the point of the examination was to assist me to reach an informed assessment as to whether I was ‘satisfied’ that ‘Ms Petrenko had ‘demonstrated the capacity to perform satisfactorily the functions and duties of a registered trustee’: see section 20-2(d) of the Rules.
In my opinion, I was not particularly assisted by the way the parties framed the examination process in the Tribunal. I acknowledge that the parties sought to assist me with their submissions in respect of Ms Petrenko’s transcribed answers. I also acknowledge I was given a set of model answers by the respondent. Beyond that, I was left to my own devices, so to speak, and the respondent invited me to assess Ms Petrenko on an ‘impressionistic basis’ for myself. I would have benefited, for example, from the following assistance:
(a)A marking guide. This would have allowed me to grade, or allocate points to, each transcribed response. The guide would also have specified the pass/fail threshold (which may, or may not, have been set at 50% of maximum marks); and
(b)An indication of any questions that Ms Petrenko had to answer correctly or at least substantially correctly in order to pass;
(c)An indication of other levels of competence the Committee normally encounter in candidates. I would then have been able to determine whether Ms Petrenko’s performance was on a par with other candidates’, whether it exceeded other candidates’ performance, or whether it was below par. That would have been helpful information since the examination is only one part of the material I must weigh in determining Ms Petrenko’s capacity.
Moreover, what allowance ought I to make for the fact that the oral examination took place in a hearing room, where the applicant was about to give sworn evidence? There was clearly an additional pressure on Ms Petrenko in this circumstance. It is difficult to make an accurate allowance for that unusual circumstance.
Nevertheless, I have perused the transcribed answers as I was asked to do. I have allocated the answers a ‘pass’ overall. I have proceeded on the basis that a clear majority of answers were conceded by the respondent to have been correctly (or partially correctly) answered. I have not proceeded to decide whether the pass was at a higher level or not given the absence of information I had before me (see [51] (above)). I have simply confined myself to deciding as best I can whether a ‘pass’ or a ‘fail’ should be awarded.
Importantly, I also add that I did not find the examination useful as a measure of Ms Petrenko’s ‘capacity’ in any event. The questions were largely of the type that one might expect to find in an undergraduate paper following a course of basic lectures, where students are first introduced to a subject. The questions I asked did not extend beyond what I judged to be a reasonably elementary level. Failing such a test might well be a strong indicator that an applicant does not yet have the necessary knowledge base to be a registered trustee in bankruptcy. But the converse does not follow in my opinion. The questions were insufficiently taxing or searching, in my opinion, to permit a candidate to demonstrate real competence.
That is something I wish to draw to the Committee’s attention, although I am also mindful that the responsibility for setting standards rests with the regulator and not me. While I offer my observations in this regard, others will need to decide finally whether my observations are apposite.
WHETHER APPLICANT HAS DEMONSTRATED HER CAPACITY
With that it mind, I now turn to decide whether I am ‘satisfied’ that Ms Petrenko has demonstrated her capacity to perform the functions and duties of a trustee satisfactorily. This is a wider question than whether she has passed the oral examination.
I am not so satisfied, which is not to say that I am satisfied that she does not have the capacity: it merely means that I am not satisfied that she does. Ms Petrenko passed the oral examination I administered, and I do bear that in mind. But I bear in mind also the limitations of the examination as I have found them to be. I bear in mind also that she had only 817 hours of recorded involvement in personal bankruptcy files in the 5-year period she nominated. This has been augmented in the period from 2 April 2021 to 19 August 2022 by a further 880 hours, but her experience overall is still relatively limited. Bankruptcy has not been the main focus of her work.
References can be important, and I have considered the references provided by Ms Petrenko. I turn to these now. I do not attach much weigh to her husband’s reference or that of their business partner, Mr Cantone given her close connections with them.
I attach some weight to Mr Elix’s reference.[18] Mr Elix is a legal practitioner who was instructed by Worrells. Mr Elix accepts that he has not ‘directly supervised’ Ms Petrenko’s work but has ‘observed her work and the manner in which she conducted herself at a senior level in many personal and corporate matters’. He gives a list of nine files where he was ‘aware from my work as a solicitor being instructed to act for each of Mr Cooper and Mr Cantone that Ms Petrenko has the experience set out’ in his letter. Of the nine matters he nominates, three involved personal bankruptcies.
[18] HB, 34-36.
I have had regard to the reference provided by Mr Robert Naudi of Rodgers Reidy.[19] He indicates that his ‘dealings with [Ms Petrenko] have been through various professional training sessions, attending presentations where [Ms Petrenko] was a joint presenter with Mr Cooper and, to a limited extent, through insolvency engagements that have common elements between our firms’. He acknowledges that he has not directly supervised her work, but he has observed the results of her work in his interactions with Mr Cooper. He then speaks of what he assumes was her work in respect of three files. He concludes that she has carried out the work in a competent manner and demonstrated that she is a fit and proper person with honesty and integrity. He refers to his engagements with her as ‘limited’ but offers a favourable opinion of her capacity.
[19] Ibid, 74-76.
I do not attach much weight to the reference provided by Mr Narayan of Travancore dated 20 August 2022. Oracle Insolvency Services is a client of his firm. He says plainly that he has become friends with each of Mr Cooper, Mr Cantone and Ms Petrenko. There is little personal bankruptcy work referred to and analysed in his letter.
I attach some weight to the brief letter by Mr Tony Hurren, barrister, dated 24 June 2022. He refers to her sound knowledge in complicated proceedings, and refers in particular to one set of proceedings, but only one, in the Federal Circuit Court.
CONCLUSION ON ‘DEMONSTRATED CAPACITY’
I must weigh all the matters to which I have referred. All in all, I find that I am not satisfied that Ms Petrenko has the requisite capacity under section 20-2(d) of the Rules. I have not found the references decisive for the reasons given. I have found the total number of hours worked on bankruptcy files from April 2015 to August 2022 to be relatively limited although it has increased in more recent years. Ms Petrenko passed the oral examination I administered in my judgment, but how well, I cannot say for the reasons I have given. In any event, I did not find it a useful tool, again for the reasons given.
There is, I accept, a power to register Ms Petrenko despite her failure to meet a particular requirement provided she is suitable to be registered as a trustee: see section 20-20(5) of the Schedule. As just noted, however, the exercise of this power depends upon Ms Petrenko ‘being suitable to be registered as a trustee’. This power has a very limited role to play in this case because I have formed the view that I am not satisfied that Ms Petrenko has the capacity to perform satisfactorily the functions and duties of a registered trustee.
It was further put to me that Ms Petrenko could be appointed subject to a condition that she accept joint appointments only. I think that is a matter that belongs squarely to the Committee to decide on further review (see below).
FINAL RESULT ON MY REVIEW
The Committee clearly placed some considerable store on the results of their oral examination, and, as I have explained, my view is that Ms Petrenko passed the oral examination I administered. It seems to me that because the parties agreed that I should conduct an oral examination, and because Ms Petrenko passed that examination (whereas the Committee was influenced by the fact that she had failed the examination they administered), I should not allow the decision under review to stand. As I am not satisfied, however, that Ms Petrenko has demonstrated her capacity to perform the duties and functions of a registered trustee, I am not in a position to substitute a decision that she be registered.[20] The matter should go back to the Committee for further assessment.
[20] See section 43(1)(c)(i) of the Administrative Appeals Tribunal Act, 1975.
The appropriate decision in my opinion is to set aside the decision under review and to remit the matter for reconsideration in accordance with the following directions:[21]
1. The Committee should allow Ms Petrenko the opportunity to provide updated figures of her ‘relevant employment’ at a senior level for the five years preceding the date of my decision (or any other convenient date decided upon by the Committee);
2. The Committee should allow Ms Petrenko the opportunity to provide further references and any other further information that she wishes in support of her application; and
3. The Committee must take into account the fact that Ms Petrenko passed the oral examination I administered, and it must then decide in light of all the material before it whether a further examination is needed (bearing in mind especially my comments about the limitations of the examination I administered). If it decides a further examination would assist it, it must administer a written examination, not an oral examination.
[21] Cf section 43 (1)(c)(ii) of the Administrative Appeals Tribunal Act, 1975.
FUTURE EXAMINATIONS IN THE TRIBUNAL

I now set out my view as to why the Tribunal ought not to be asked again to administer an oral examination. The Tribunal does exercise a de novo jurisdiction.[22] It has the same powers and authorities as the decision-maker for the purpose of reviewing a decision.[23] Its jurisdiction does include, therefore, the power to administer an examination. I do not say that in no circumstances would the Tribunal exercise this jurisdiction; but in principle it seems to me that the Tribunal should not do so. The Tribunal is not the regulatory authority, and it will not generally have the requisite expertise or experience to assess examinees in the light of a well-understood benchmark. The Tribunal may, of course, receive evidence tending to show that the process by which an examination was administered by a committee was flawed. It might also receive expert evidence if an attack is mounted on the correctness of a committee’s views of the law.
[22] See Frugtniet v ASIC [2019] HCA 16; (2019) 266 CLR 250; (2019) 79 AAR 9.
[23] See section 43(1) of the Administrative Appeals Tribunal Act, 1975.
But to suggest that a proper exercise of the Tribunal’s jurisdiction requires it always, or even regularly, to re-exercise the power of administering an examination is, with respect, a mistaken view of the Tribunal’s role. It may have the jurisdiction to proceed in this way, but it would only ever exercise this jurisdiction exceptionally; and I must say I have struggled to imagine a circumstance where it would be appropriate to do so.
Indeed, in this case, it is noteworthy that the Committee itself was not required to administer an oral examination. It was required to conduct an interview[24] and was empowered, but not obliged, to require the applicant ‘to sit for an exam’.[25] In my opinion this included an oral examination of the type it chose to administer. It is hard to see how the Tribunal, as part of its review, should feel itself obliged to administer a further oral examination simply because the Committee had chosen to administer one in its discretion.
[24] See section 20-20(2)(a) of the Schedule.
[25] See section 20-20(2)(b) of the Schedule.
The examination I ended up administering was, as I have said, not particularly helpful; and I remain unpersuaded that re-conducting an examination in the Tribunal hearing room is a proper way to conduct a review of a committee’s adverse assessment of an applicant’s examination result. If the advice I have given in this decision is followed, oral examinations will cease in any event. If oral examinations are superseded by written papers, I would make the point that an application for a review of a ‘fail’ grade for a written examination should not result in the Tribunal being asked to re-administer a written examination.
FINAL OBSERVATION ON PRE-HEARING CONCILIATION PROCESS
As a final observation, I would note that I understand from the parties that this matter may have been subject to an extensive pre-hearing conciliation process extending over two or more years before it came to be listed for hearing in the Tribunal as a contested application. I do not make any comment on that process as such. It does seem to me, however, that it would have been far better for the parties to have faced the reality of their impasse at a much earlier stage and to have brought this matter on for determination much earlier than they did. That is a matter I draw to the attention of the parties, without knowing, of course, what actually transpired during the process.
I certify that the preceding seventy-two (72)
paragraphs are a true copy of the reasons
for the decision herein of Senior Member
Dr N A Manetta
……[sgnd]………………………..
Associate
Dated: 15 March 2024
Date of hearing:  20 October, 20 November 2023
Advocate for the Applicant:      Ms G Walker, KC
Murray Chambers
Advocate for the Respondent:  Mr M Douglas
Murray Chambers