PHILLIPS and INSPECTOR-GENERAL IN BANKRUPTCY - [2011] AATA 432

CATCHWORDS - BANKRUPTCY – summons for production of documents – objection to production and inspection – principles applicable to a subpoena in a court applicable to a summons – adjectival relevance – concept and parameters of abuse of process – whether oppressive - consideration of confidentiality – implied undertaking - adjectival relevance established – no abuse of process – inspection of documents permitted.

PRACTICE AND PROCEDURE – inter-relationship between ss 149N(1) and (1A) – objection to discharge of bankruptcy – power of trustee to file notice of objection compared with power of Inspector-General on review – court’s supervisory role over power of trustees.

Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265
Australian Securities and Investments Commission v Forge [2003] FCA 1339; (2003) 133 FCR 487
Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250
Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98
Carter v Hayes [1994] SASC 4477; (1994) 61 SASR 451; 72 A Crim R 387
Comcare v Maganga [2008] FCA 285; (2008) 101 ALD 68; 47 AAR 487
Commissioner for Railways v Small (1938) 38 SR (NSW) 564
Commonwealth of Australia v Albany Port Authority [2006] WASCA 185
Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125; 124 ALR 493
Cosco Holdings Pty Ltd v Commissioner of Taxation [1997] FCA 1504
Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124
Dorajay Pty Ltd v Aristocrat Leisure Ltd [2005] FCA 588
Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 24 ALR 577; 2 ALD 60
Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10; 128 ALR 391
Fitz-Gibbon v Inspector General in Bankruptcy [2002] FCA 1677; (2002) 180 ALR 475
Frost v Sheahan [2008] FCA 1073; (2008) 249 ALR 538
Frost v Sheahan [2009] FCAFC 20
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125; 248 ALR 609; 82 ALJR 1259
Hunt v Wark (1985) 40 SASR 489
Inspector-General in Bankruptcy v Nelson (1998) 86 FCR 67; 168 ALR 340
Mandic v Phillis [2005] FCA 1279; 225 ALR 760
Marsden v Amalgamated Television Services Pty Limited [1999] NSWSC 619
Nguyen v Pattison [2005] FCA 650; (2005) 142 FCR 561; 86 ALD 43
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 62 ALJR 389
Otter Gold Mines Ltd v McDonald (1997) 76 FCR 467; 48 ALD 222; 147 ALR 322
Pancontinental Mining Ltd and Others v Burns and Others [1994] FCA 1294; (1994) 124 ALR 471; 12 ACLC 853
Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia [2009] FCA 1203
Prudential Assurance Co v Fountain Page [1991] 3 All ER 878; 1 WLR 756
R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13; 29 ALR 289
Re Becker and Minister for Immigration and Ethnic Affairs [1977] AATA 12; (1977) 1 ALD 158; 15 ALR 696
Re General Merchandise and Apparel Group Pty Ltd and Chief Executive Officer of Customs [2009] AATA 988; (2009) 51 AAR 1; 114 ALD 289
Re Rana and Military Rehabilitation and Compensation Commission [2009] AATA 361; 109 ALD 217; 50 AAR 191
Re Rimanic and Inspector-General in Bankruptcy [2010] AATA 875
Re Trade Practices Commission v Kimberley Homes Pty Limited [1989] FCA 262
Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467; 82 ALJR 1147
Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455
Summers v Moseley [1834] EngR 320; (1834) 2 Cr & M 477
Thomas v Donnelly (No 2) [1997] FCA 1142
Trade Practices Commission v Arnotts Ltd and Others (No 2) (1989) 88 ALR 90
VHAU of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 376
Wilson v Minister for Aboriginal and Torres Strait Islander Affairs [1996] HCA 18; (1996) 189 CLR 1

Administrative Appeals Tribunal Act 1975 ss 3(1), 25(4A), 33, 35, 35(2), 35(3)40(1A), 40(7),
Administrative Appeals Tribunal Amendment Act 2005
Bankruptcy Act 1966 ss 149, 149A(2)(a)(i), 149A(2)(a)(ii), 149B(1), 149B(2), 149C(1), 149C(1A), 149D(1)(b), 149D(1)(da), 149D(1)(i), 149G, 149K(1), 149N, 149N(1), 149N(2), 149N(3), 149N(1A), 149N(1B), 178
Corporations Act 2001 ss 206A, 206F(5)
Privacy Act 1988 s 14

DECISION AND REASONS FOR DECISION [2011] AATA 432

ADMINISTRATIVE APPEALS TRIBUNAL )

) 2010/0557

GENERAL ADMINISTRATIVE DIVISION )

Re:STEVE PHILLIPS

Applicant

And:INSPECTOR-GENERAL IN BANKRUPTCY

Respondent

DECISION

Tribunal: Deputy President S A Forgie

Place: Melbourne

Date: 22 June 2011

Decision:The Tribunal decides that it is appropriate to make an order permitting the parties to inspect the documents.

S A Forgie
Deputy President

REASONS FOR DECISION

At the request of the Inspector-General in Bankruptcy (Inspector-General), a summons was issued requiring Ms Tanya Danijela Belaj to produce a number of documents relating to Phoenix International Group Pty Ltd (Phoenix) and of Beijing Garden Resort Pty Ltd (Beijing). I have described the documents at [26] below. Ms Belaj produced the documents at a return of summons hearing held on 4 May 2011 but objected to doing so. I have decided that her objections have not been made out and have ordered that the parties may inspect the documents.

BACKGROUND

Legislative framework relating to objections

A.Period of bankruptcy

In broad terms, s 149 of the Bankruptcy Act 1966 (Bankruptcy Act) provides that a person, who is a bankrupt, is discharged from bankruptcy at the end of the period of three years from the date he or she filed his or her statement of affairs.[1] The person’s period of bankruptcy may, however, be extended. Extension occurs when an objection to the person’s discharge has taken effect in accordance with s 149G and has not been withdrawn or cancelled. It leads to a person’s bankruptcy being extended from three years to either eight or five from the date he or she filed a statement of affairs. It becomes eight if the objection was made on a ground that included grounds specified in s 149A(2)(a)(i). Those grounds include the ground provided for in s 149D(1)(da) i.e. “after the date of bankruptcy, the bankrupt intentionally provided false or misleading information to the trustee”. The period becomes five years if made on a ground that is specified in s 149A(2)(a)(ii). The ground specified in s 149(1)(b) is one of those grounds i.e. “after the date of bankruptcy, the bankrupt contravened section 206A of the Corporations Act 2001 (disqualification from managing corporations)”.
[1] ss 149(3)(a) and (4)

B. Objection to discharge from bankruptcy

An objection to a person’s discharge from bankruptcy can only be made by that person’s trustee in bankruptcy. He or she objects by filing a written notice of objection with the Official Receiver. This is the effect of s 149B(1) and, subject to certain qualifications that follow, it is clear that it is for the trustee to decide whether or not to file that notice. Section 149B(1) provides:
“Subject to the following provisions of this Subdivision, at any time before a bankrupt is discharged from bankruptcy under section 149, the trustee may file with the Official Receiver a written notice of objection to the discharge.”

There is, however, one circumstance in which the trustee has no discretion as to whether he or she files a notice of objection and is required to do so. Under s 149B(2), he or she:

“… must file a notice of objection to the discharge if the trustee believes:
(a)that doing so will help make the bankrupt discharge a duty that the bankrupt has not discharged; and
(b)that there is no other way for the trustee to induce the bankrupt to discharge any duties that the bankrupt has not discharged.”

The form that the notice must take is set out in s 149C(1):
“A notice of objection must:
(a)set out the ground or each of the grounds of objection, being a ground or grounds set out in subsection 149D(1) but not being a ground or grounds of a previous objection to the discharge that was cancelled; and
(b)refer to the evidence or other material that, in the opinion of the trustee, establishes that ground or each of those grounds; and
(c)state the reasons of the trustee for objecting to the discharge on that ground or those grounds.”

The trustee’s obligation to state reasons for objecting does not apply to those grounds set out in s 149C(1A). Among those grounds is that in s 149D(1)(da).

C.Review of trustee’s decision by Inspector-General

The Inspector-General may review the trustee’s decision to file a notice of objection either on her own initiative or when requested by the bankrupt for reasons that appear to her to be sufficient to justify such a review.[2]
[2] s 149K(1)

Section 149N sets out the decision that the Inspector-General must make on the review of the trustee’s decision if she is satisfied of one or more of four matters. That section provides:
“(1) On review of a decision, if the Inspector-General is satisfied that:
(a)the ground or grounds on which the objection was made was not a ground or were not grounds specified in subsection 149D(1); or
(b)there is insufficient evidence to support the existence of the ground or grounds of objection; or
(c)the reasons given for objecting on that ground or those grounds do not justify the making of the objection; or
(d)a previous objection that was made on that ground or those grounds, on grounds that included that ground or those grounds, was cancelled;
the Inspector-General must cancel the objection.”

Should the Inspector-General be satisfied of one or more of these matters, the cancellation takes effect at the time specified in s 149N(2). If not satisfied of any of them, the Inspector-General must confirm the decision.[3]

[3] s 149N(3)

The Inspector-General must not cancel an objection if the circumstances in s 149N(1A) exist. In assessing whether those circumstances exist, the Inspector-General is not permitted to take notice of any conduct of the bankrupt after the time when the ground concerned first commenced to exist.[4] Section 149N(1A) provides:
“An objection must not be cancelled under subsection (1) if:
(a)the objection specifies at least one special ground; and
(b)there is sufficient evidence to support the existence of at least one special ground specified in the objection; and
(c)the bankrupt fails to establish that the bankrupt had a reasonable excuse for the conduct or failure that constituted the special ground.
…”

The expression “special ground” means “… a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma).”[5]

[4] s 149N(1B). In light of the express provision in s 149N(1B), the general principles expressed in Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467; 82 ALJR 1147 have no application; see [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467; 82 ALJR 1147 at [25]; 295; 396; 352; 473 and 1153 per Kirby J and [99]; 315; 412; 369; 489 and 1165 per Hayne and Heydon JJ.

[5] s 149N(1A)

In Re Rimanic and Inspector-General in Bankruptcy[6] (Rimanic), I considered the inter-relationship between ss 149N(1) and (1A) . I concluded that:
[6] [2010] AATA 875
“26. Section 149N(1A) deals with the situation in which a Notice of Objection specifies at least one special ground and there is sufficient evidence to support the existence of at least one of those special grounds. If, in addition to those two circumstances prevailing, the bankrupt fails to establish that he or she had a reasonable excuse for the conduct or failure that constituted the ground, the Inspector-General must not cancel the objection. The trustee would have had a discretion but the Inspector-General has none. The practical effect of s 149N(1A) is to restrict further the operation of s 149N(1) and the cancellation power it confers when the objection is made on a special ground.
27. The inter-relationship between ss 149N(1) and (1A) and the way in which they apply in practice has caused me some difficulty. It seems to me that the correct approach is to look at each ground specified in the Notice of Objection in turn and:
(1)first decide whether I am satisfied that any of the circumstances in
s 149N(1)(a) to (d) prevails in relation to that ground;
(2)if one or more does prevail in respect of a ground and that ground is not a special ground, the objection must be cancelled in respect of that ground under s 149N(1);
(3)if none of them prevails in respect of a ground, whether or not it is a special ground, the power to cancel (expressed in the form of an obligation to cancel) does not arise and the objection must be confirmed in respect of that ground under s 149N(3);[7] and
(4)if I am satisfied that one or more does prevail in respect of a ground that is a special ground, I must decide which of the circumstances in
s 149N(1) prevails:
(a)if the circumstances in s 149N(1)(a) or (b) prevail in relation to that special ground, the objection must be cancelled;[8] and
(b)if the circumstances in ss 149N(1)(c) or (d)[9] prevail but those in s 149N(1)(a) or (b) do not, I must decide whether the bankrupt has failed to establish that he or she had a reasonable excuse for the conduct or failure that constituted the special ground;
(i)if I am satisfied that the bankrupt has established that he or she had a reasonable excuse for the conduct or failure that constituted the special ground, I must cancel the objection;[10] and
(ii)if I am satisfied that the bankrupt has failed to establish that he or she had that reasonable excuse, I must not cancel the objection.[11]”[12]
[7] Section 149N(1A) does not come into play to achieve this result in relation to a ground that is a special ground. If none of the circumstances in s 149N(1) prevails, there is simply no power to cancel that ground of objection. If the matter is looked at from the point of view of s 149N(1A), then s 149N(1A)(a) would be satisfied for the objection would have specified one ground that is a special ground. Section 149N(1A)(b) would be satisfied for a finding that the circumstances in s 149N(1)(b) do not prevail must also lead to a finding that there is sufficient evidence to support the existence of that special ground. If the bankrupt comes within s 149N(1A)(c) by failing to have a reasonable excuse for the conduct or failure that constituted the special ground, the objection must not be cancelled under s 149N(1). If the bankrupt does put forward a reasonable excuse for the conduct or failure that constituted the special ground, s 149N(1A) has no application for each of its three paragraphs must be satisfied. As none of the circumstances in s 149N(1) prevails, no power to cancel the objection is conferred on the Inspector-General or on this Tribunal.
[8] The provisions of s 149N(1A) do not apply for it will only apply if, among other criteria, the objection specifies at least one special ground and there is sufficient evidence to support the existence of that special ground. A finding of that sort would be at odds with my already being satisfied that the circumstances set out in s 149N(1)(b) prevail i.e. that there is insufficient evidence to support the existence of the special ground.
[9] As to the circumstances in ss 149N(1)(a) and (c), see Footnote 7 above.
[10] Once I am satisfied that the bankrupt has a reasonable excuse, s 149N(1A) has no application for all of its criteria, and not just one, must be established for it to take effect. Section 149N(1) must then be given its full effect and, as the circumstances in s 149N(1)(d) prevails, its full effect is to cancel the objection. It does not provide for the exercise of any discretion in the matter.
[11] That is so even though satisfaction that the circumstances in ss 149N(1)(a), (c) or (d), or two or three of them, prevail would lead to a cancellation of the objection on that ground had it not been a special ground.
[12] [2010] AATA 875 at [26]-[27]

If the Inspector-General cancels an objection, that cancellation does not take effect until the end of the period within which an application may be made to the Tribunal for review of the decision or, if such an application is made, until the Tribunal’s decision is given.[13]
[13] s 149N(2)

There are differences between the powers of the trustee when making a decision to file a notice of objection and those of the Inspector-General when reviewing that decision. The removal of the trustee’s discretion and the imposition of an obligation upon him to file a notice of objection in the circumstances set out in s 149B(2) do not qualify the Inspector-General’s power on review. That is consistent with the fact that he is reviewing what has been done and not whether it is required to be done.

Apart from the circumstances set out in s 149B(2) and provided there is a proper ground of objection and the notice of objection is properly prepared and filed, the trustee’s discretion whether to file a notice of objection is unqualified. The same cannot be said for the Inspector-General when exercising the power given to her under s 149K to review the trustee’s decision to file a notice of objection. His discretion is limited by s 149N(1). To the extent that it sets out the circumstances in which the Inspector-General must cancel the objection, the limitation imposed upon the Inspector-General is entirely consistent with those placed on the trustee. If one or more of the circumstances specified in s 149N(1) exists, the trustee would not have had the power to file a notice of objection in the first place. In the absence of power to act, discretion has no place. The trustee had no basis on which he or she could file a Notice of Objection on the particular ground and the Inspector-General must cancel the objection.

If none of the circumstances set out in s 149N(1) exists, the difference between the powers of the Inspector-General and of the trustee becomes apparent. If the contrary of one or more of the circumstances in s 149N(1) prevailed at the relevant time, a trustee would have had the power to file the notice of objection. Subject to the provisions of s 149B(2), whether or not he or she would have done so would have been a matter for his or her discretion. If, in the case of a ground that is not a special ground, the Inspector-General is not satisfied that one or more of the circumstances in s 149N(1) is the case, the Inspector-General must confirm the objection. The Inspector-General has no discretion. That is the outcome of the application of s 149N(3).

When an objection specifies a ground of objection that is a special ground of objection, ss 149N(1A) and (1B) modify the operation of s 149N(1). The effect of s 149N(1A) is to render irrelevant the provisions of ss 149N(1)(c) and (d). That is to say, it does not matter whether the trustee’s reasons for objecting on that special ground justifies the making of the objection or not or whether an objection has previously been made on that special ground. Of the matters specified in s 149N(1), all that matters is that the objection specifies a special ground and that there is sufficient evidence to support the existence of that special ground. The issue for resolution then becomes whether the bankrupt fails to establish that he or she had a reasonable excuse for the conduct or failure constituting that special ground. Applying s 149N(1B), no notice can be taken of the bankrupt’s conduct after the special ground concerned first commenced to exist. If the bankrupt fails to establish a reasonable excuse, the Inspector-General must not cancel the objection.

If an objection does not contain a ground that is a special ground, it is not enough merely to establish that the ground has been made out. If the trustee’s reasons for objecting on that ground do not justify the making of the objection, the objection must be cancelled. That would follow from the fact that the circumstance in s 149N(1)(c) prevails or has been established so the Inspector-General is required to cancel the objection. From the Tribunal’s point of view, that would lead to the setting aside of the Inspector-General’s decision affirming the trustee’s decision to file a notice of objection and substituting a decision to set aside the decision to file a notice of objection. This interpretation is consistent with the interpretation adopted by Stone J in Fitz-Gibbon v Inspector General in Bankruptcy[14] in applying the principles in Inspector-General in Bankruptcy v Nelson[15] (Nelson). In Nelson, the Full Court had summarised the position by saying that “… the existence of a permissible ground supported by sufficient evidence is a threshold: there must also be reasons justifying the making of the objection in the particular case.”[16] The Full Court decided that:
“… Maintenance of the objection will serve no purpose other than to penalise him. We do not think that this is a purpose of the discretion given to the trustee to file a notice of objection to discharge.”[17]
[14] [2000] FCA 1677; (2000) 180 ALR 475 at [36]; 484
[15] (1998) 86 FCR 67; 168 ALR 340; Wilcox, Lindgren and RD Nicholson JJ
[16] (1998) 86 FCR 67; 168 ALR 340 at 78-79; 352. Although decided before the concept of a “special ground” was introduced into the Bankruptcy Act by amendments made by the Bankruptcy Legislation Amendment Act 2002, No 131 of 2002, s 3, Schedule 1, item 123, this principle remains equally applicable to an objection that does not specify a special ground.
[17] (1998) 86 FCR 67; 168 ALR 340 at 82; 356

Clearly penalising a bankrupt is not a relevant consideration but the Full Court in Nelson also looked to the matters that would be relevant to a trustee in formulating reasons for objecting to a bankrupt’s discharge from bankruptcy. It said that “… considerations of purpose, utility, and relevance to bankruptcy context, were … relevant to a trustee’s decision whether to object.”[18] The purpose of the Bankruptcy Act was discussed by Branson and Stone JJ in the following two passages from Australian Securities and Investments Commission v Forge:[19]
“ The Act as a whole reflects legislative recognition of the public interest, as well as private interests, in the management of personal insolvency. It seeks to achieve a balance between the public interest in creditors of an insolvent being paid rateably from the property of the insolvent and the public interest, as well as the private interest of the debtor, in the debtor not being reduced to a mendicant. It also reflects a balance between the public interest in limiting the capacity of insolvent persons to incur debts that they will not be able to satisfy and the public and private interest in eventually allowing insolvent persons to be free from the burden of past debts to start financially afresh.”[20]
“ Bankruptcy legislation is not for the determination of disputes arising between citizens or between citizen and State. It is legislation designed for the benefit of the community as a whole. Thus, in considering whether or not to exercise powers under the Act, the court must have regard not only to the rights of the parties to the proceedings, but to the community as a whole. …”[21]
[18] (1998) 86 FCR 67; 168 ALR 340 at 79; 352-353
[19] [2003] FCA 1339; (2003) 133 FCR 487; Branson, Emmett and Stone JJ
[20] [2003] FCA 1339; (2003) 133 FCR 487 at [4]; 488
[21] [2003] FCA 1339; (2003) 133 FCR 487 at [29]; 493

Similar considerations underpin the following statement by Emmett J in Thomas v Donnelly (No 2):[22]
“ A trustee is of course an officer of the court and, in the exercise of his powers and functions, he is required to take into account not only the interests of creditors but also the interest of the bankrupt and of the community generally. In exercising his powers, the trustee should have in mind the object of enforcing careful and moral conduct on the part of the debtor and to uphold the commercial morality of the community.”
[22] [1997] FCA 1142

Although not dealing with the review provisions with which I am concerned and speaking of the Court’s discretionary powers under s 178,[23] Weinberg J said in Nguyen v Pattison[24] that the Court should not:
“… disregard the relevant decision of the trustee or ignore the well-established policy under bankruptcy legislation that the Court should not unduly interfere with the day-to-day administration of the bankrupt’s estate by a trustee. The trustee is made responsible for the administration of the bankrupt estate. He or she must, in the course of that administration, make a variety of decisions aimed at enabling the administration to be carried out promptly and efficiently. Some of these decisions involve business or commercial considerations in which the trustee’s own background in such matters would itself provide a basis for the Court declining to interfere unless the decision was perverse or clearly wrong.
Nor would it be proper for the Court to give no weight, or inadequate weight, to the fact that some of the grounds upon which the objection was based are designated ‘special grounds’. That of itself is a matter of some significance, and tends against automatically lifting such an objection even where remedial steps have been taken.
The Federal Magistrate plainly considered that he was entitled to have regard to any remedial steps that the appellant had taken prior to the hearing of the application before him. Ultimately, he considered, in the exercise of his discretion, that those remedial steps did not outweigh the factors rendering it just and equitable to extend the bankruptcy. It is that decision that is the subject of this appeal.
…
There is obvious utility in the appellant’s bankruptcy being extended. The Federal Magistrate considered, on the basis of the material adduced before him, and in particular the s 81 examination, that the appellant's conduct warranted further and more detailed investigation. It is true that such investigations can take place even if a bankrupt has been discharged. However, as Mr Agardy pointed out, there are distinct advantages in keeping the bankruptcy on foot while they take place. Otherwise, a contribution assessment issued after discharge might require a fresh bankruptcy notice to issue, and a completely new sequestration proceeding to be commenced. Moreover, there is a level of control that can be exercised by a trustee over a bankrupt that is not available in relation to a former bankrupt.”[25]
[23] Section 178 provides that, within certain time limits, a person, including a bankrupt, affected by an act, omission or decision of the trustee may apply to the Court and the Court may make such order as it thinks just and equitable. It is a provision that confers on the Court a “supervisory jurisdiction over the conduct of the trustee”: Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124 at 132 per Brennan CJ, Gaudron and McHugh JJ
[24] [2005] FCA 650; (2005) 142 FCR 561; 86 ALD 43
[25] [2005] FCA 640; (2005) 142 FCR 561; 86 ALD 43 at [73]-[77]; 576-577; 58-59

Also dealing with an application under s 178, Besanko J considered factors that may be relevant in a consideration of whether a trustee should withdraw an objection. These factors seem equally applicable to a consideration of whether the trustee’s reasons justify the making of the objection. They are:
“The most important consideration in the exercise of the discretion whether to withdraw an objection will be whether there is utility in the administration of the estate continuing. If there is utility in the administration of the estate continuing, then even though a properly based objection has been substantially complied with it may be appropriate for the trustee to refuse to withdraw the objection. In exercising the discretion it is likely that it will be appropriate for a trustee to consider a range of matters. It is not possible to state those matters exhaustively. Some of the matters which seem to me to be relevant are the nature and extent of the benefit which may accrue to the estate if the administration continues, any connection between the ground of objection and delay in the timely administration of the estate, delay by the trustee in the timely administration of the estate for reasons unrelated to the ground of objection and any connection between the ground of objection and a need by the trustee to conduct further inquiries and investigations. It would also be appropriate for the trustee to have regard to the interests of the bankrupt and the overall period of the bankruptcy. In a proper case, it will also be appropriate for the trustee to take into account the fact that he retains certain powers, or is owed certain obligations by a bankrupt, even after the bankrupt’s discharge from bankruptcy. Examples are the power to examine and require the production of books in s 81, and the obligation in s 152 of the Act.”[26]
[26] Frost v Sheahan [2008] FCA 1073; (2008) 249 ALR 538 at [35.5(2)]; 548. Appeal dismissed Frost v Sheahan [2009] FCAFC 20; Ryan, Mansfield and Jagot JJ

Previous decisions in these proceedings

In my last decision in these proceedings,[27] I decided that Mr Phillips had applied for review of the decision of the respondent dated 21 January 2010 to confirm the trustee’s decision to file a notice of objection on 4 September 2009. That meant that one decision of the trustee, and not two decisions, to file a notice of objection was under review. It also meant that only two grounds of objection were under review for the third was the subject of another decision to file a notice of objection. The Inspector-General had set that decision aside and Mr Phillips had not, on my view, applied for review of his decision to do so. The two grounds of objection remaining are those under:
s 149D(1)(b)
“after the date of the bankruptcy, the bankrupt contravened section 206A of the Corporations Act 2001 (disqualification from managing corporations)”; and
[27] [2011] AATA 25

s 149D(1)(da)
“after the date of the bankruptcy, the bankrupt intentionally provided false or misleading information to the trustee”.

The ground under s 149D(1)(b) needs to be understood in light of s 206A of the Corporations Act 2001 (Corporations Act). Section 206A(1) provides:
“A person who is disqualified from managing corporations under this Part commits an offence if:
(a)they make, or participate in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
(b)they exercise the capacity to affect significantly the corporation’s financial standing; or

(c)they communicate instructions or wishes (other than advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation) to the directors of the corporation:
(i)knowing that the directors are accustomed to act in accordance with the person’s instructions or wishes; or
(ii)intending that the directors will act in accordance with those instructions or wishes.”

The sole defence to a contravention of s 206A(1) rests on the person’s having “… permission to manage the corporation under either section 206F or 206G and their conduct was within the terms of that permission.”[28] Section 206F provides that the Australian Securities and Investments Commission (ASIC) may disqualify a person from managing corporations in various circumstances.[29] Section 206F(5), however, provides some amelioration of the disqualification provisions. It provides:
“ASIC may give a person who it has disqualified from managing corporations under this Part written permission to manage a particular corporation or corporations. The permission may be expressed to be subject to conditions and exceptions determined by ASIC.”
[28] Corporations Act, s 206A(1B)
[29] Corporations Act, ss 206F(1)-(4)

In my earlier decision in these proceedings,[30] I considered whether I should authorise the District Registrar or a Deputy Registrar to refuse Mr Phillips’ request to issue a summons addressed to Pitcher Partners and Blake Dawson. I identified three issues arising in relation to the review of the Inspector-General’s decision but only two remained after the ground of objection under s 149D(1)(i) was no longer relevant. Those issues were the issues arising under ss 149D(1)(b) and (da).[31] I then decided:
56. The issues in relation to 1 and 3 are self evident and who is funding the trustee’s investigation into Mr Phillips affairs or those of Beijing Garden Resorts Pty Ltd or Phoenix International Group Pty Ltd does not assist me in deciding whether
Mr Phillips has engaged in the behaviour described. As to the second ground, which may (or may not) turn out to be the only ground in contention, I have set out the provisions of s 206A of the Corporations Act. Again, information relevant to the funding of the trustee’s investigations is not relevant. What is relevant is Mr Phillips’ behaviour in relation to any corporation such as Beijing Garden Resorts Pty Ltd or Phoenix International Group Pty Ltd.
57. Mr Phillips also asked that a summons be issued requiring Blake Dawson to appear at the Tribunal and to ‘Provide copies of all records documents to and from Blake Dawson and Pitcher Partners and the Trustee.’ He has not specified the subject matter of the records and documents he seeks or how they will be relevant to the issues raised in the consideration of all or any of the grounds of objection. He has given me no basis on which I can come to a view that there will be records or documents that will have some apparent or actual relevance. All that he has shown to me in the second summons is a desire to go through the records and documents to see if he can find anything he thinks may be relevant. He is engaging in a fishing exercise and I refuse to give him the block and tackle to do so by issuing the second summons.”[32]
[30] [2011] AATA 25
[31] [2011] AATA 25 at [55]
[32] [2011] AATA 25 at [56]-[57]

The trustee’s reference to evidence or other material for objecting and his reasons

In his notice of objection to discharge, the trustee set out the following evidence in support of the ground of objection under s 149D(1)(b):
▪Marked exhibit 1 is a copy of the Australian Securities and Investments Commission (ASIC) extract from Phoenix International Group Pty Ltd (ACN 109 614 011) (Phoenix) which confirms that the bankrupt was the sole director of Phoenix before being made bankrupt and ceased to be a director of Phoenix upon the date of bankruptcy. The extract further confirms that the principle [sic] place of business of Phoenix is the bankrupt’s residential address.
▪Marked exhibit 2 is a copy of the Sequestration Order made by Federal Magistrate Riethmuller of this Honourable Court on 28 August 2006.
▪Marked exhibit 3 is [a] copy of the Builder’s Side Agreement executed by the bankrupt as the director and secretary of Phoenix on 8 September 2006, after the date of bankruptcy, being 28 August 2006.
▪Marked exhibit 4 is a copy of the bankrupt’s Statement of Affairs dated 27 September 2006.
▪Marked exhibit 5 is a copy of the bankrupt’s income questionnaires for the Contribution Assessment Periods 28 August 2006 to 27 August 2007 (CAP 1), 28 August 2007 to 27 August 2008 (CAP 2) and 28 August 2008 to 27 August 2009 (CAP 3), wherein the bankrupt maintains that he is employed by Phoenix and receives gross wages of $21,000 per annum for each CAP.
▪Marked exhibit 6 is a copy of correspondence between Australia Harwood [sic] Decking and Flooring and Decking Co. and Phoenix signed by the bankrupt on 20 October 2008, 12 December 2009, 6 January 2009 and 19 January 2009.
▪Marked exhibit 7 is a copy of Mr Lindsay Bainbridge’s file note of 19 January 2009 relating to his discussion with the Boroondara City Council which confirms that the bankrupt’s mobile phone number is the only point of contact provided for Phoenix in relation to the building permit issued to Phoenix for the construction project located at 64 Riversdale Road, Hawthorn, Victoria (the Hawthorn Construction).
▪Marked exhibit 8 is a copy of Mr Bainbridge’s file note of 21 January 2009 relating to his discussion with Mr Phil Allwood of Lakeside Corporate Services Pty Ltd, wherein Mr Allwood advised that none of his eight clients, who were engaged by Phoenix, had any contact with the directors of Phoenix and only had contact with the bankrupt. Mr Allwood further claims that one of Phoenix’s directors, Ms Tanya Belaj, is the bankrupt’s girlfriend.
▪Marked exhibit 9 is a copy of the Progress Report dated 12 February 2009 in relation to the Hawthorn Construction wherein attachment three is executed by the bankrupt.
▪Marked exhibit 10 is a copy of the email of Mr Nathan Smith of the Bank of Queensland Limited (BOQ) dated 18 February 2009, wherein Mr Smith advised that the bankrupt is a signatory to the bank account of Phoenix maintained with BOQ.
▪Marked exhibit 11 is a copy of Mr Bainbridge’s file note dated 25 February 2009 relating to his discussion with Mr Darren Cain of Kliger Partners.
▪Marked exhibit 12 is a copy of the Reason for the Judgement handed down by Judge Shelton on 1 May 2009 in the County Court in case number C1-09-00781 between Phoenix and Resources Combined No 2 Pty Ltd. It is noted by Judge Shelton at paragraph 14 that: ‘Strangely, the plaintiff (Phoenix) principally relies upon the evidence not of its two directors but of Steve Phillips, a former director and undischarged bankrupt and now project manager employed by the plaintiff who swore an affidavit on 21 April 2009.’
▪Marked exhibit 13 is a copy of the files of documents obtained from Gantley Pty Ltd relating to the Hawthorn Construction and a further construction project located at 420 Sherrard Street, Ballarat (the Ballarat Construction). Contained in these files is documentary evidence that the bankrupt:
i.executed a considerable quantum of correspondence on behalf of Phoenix;
ii.provided his personal mobile phone number as the only telephone contact number for Phoenix on correspondence issued by Phoenix.
iii.executed numerous Statements and/or Declarations of the Builder on behalf of Phoenix;
iv.instructs the solicitor of Phoenix;
v.signed correspondence as the building practitioner of Phoenix. Pursuant to Section 176(4) of the Building Act 1993 it is an offence for a corporation who carries out domestic building work to operate without at least one of the directors being a registered building practitioner.
vi.applied for a building permit(s) on behalf of Phoenix.
vii.Demonstrates a thorough knowledge of Phoenix’s daily operations while purporting to be employed on a part-time basis with Phoenix and in receipt of a net wage of $360 per week as advised in his income questionnaires (above).”[33]
[33] T documents at 766-768

The trustee set out the following evidence in support of his objection under

s 149D(1)(da):

▪Marked exhibit 14 is a copy of the bankrupt’s letter to the Trustee dated 26 January 2009 wherein the bankrupt claims not to be privy to documentation relating to Beijing Garden Resort Pty Ltd ACN 064 288 455 (Beijing).
▪Marked exhibit 15 is a copy of the letter of Ms Michelle Scott of BankWest dated 19 February 2009 wherein it is confirmed that the bankrupt is the sole signatory to Beijing’s BankWest bank account. Notwithstanding his advice in his letter of 26 January 2009, the bankrupt does have access to books and records of Beijing, at the very least the bank statements for that company through his capacity as sole signatory to that bank account.”[34]

[34] T documents at 768

The trustee’s reasons for objecting to Mr Phillips’ discharge were:
“My investigations of the bankrupt’s conduct and examinable affairs indicate that the bankrupt has continued to act as a director of Phoenix after the date of bankruptcy and notwithstanding his resignation as director.
I believe that these objections may help make the bankrupt discharge duties that the bankrupt has previously failed to discharge. I have limited means available to me to induce the bankrupt to discharge these duties.”[35] [36]
[35] T documents at 769
[36] In my reasons for my second decision, I said that these were the trustee’s reasons for filing an objection under s 149D(1)(b): [2011] AATA 25 at [30]. A closer reading of his notice and the placement of his reasons after he has set out his evidence relating to the grounds in both ss 149D(1)(b) and (da) suggests to me that these are his reasons for objecting under both grounds. The reference in the first paragraph of his reasons is only to matters raised by s 149D(1)(b) but the second is more broadly framed. In any event, the trustee had no need to give his reasons for objecting under s 149D(1)(da) for it is a provision specified in s 149C(1A).

THE SUMMMONSES

The summonses required Ms Belaj to produce:
(1)all income tax returns, balance sheets, and profit and loss statements of Phoenix for each financial year from 30 June 2004 to the date of this summons;
(2)all income tax assessments of Phoenix for each financial year from 30 June 2004 to the date of this summons;
(3)all group certificates issued by Phoenix for each financial year from 30 June 2004 to the date of this summons;
(4)any documents and/or correspondence showing Phoenix’s title to assets that are considered to have a market value of at least $5,000 as at 4 February 2006;
(5)any documents and/or correspondence showing Phoenix’s acquisition, purchase or receipt of any assets that are considered to have a market value of at least $5,000 from 4 February 2006 to the date of this summons;
(6)any documents and/or correspondence showing Phoenix’s interest in any asset with a market value of at least $5,000 from 4 February 2006 to the date of this summons;
(7)all income tax returns, balance sheets, and profit and loss statements of Beijing for each financial year from 30 June 2004 to the date of this summons;
(8)all income tax assessments of Beijing for each financial year from 30 June 2004 to the date of this summons;
(9)all group certificates issued by Beijing for each financial year from 30 June 2004 to the date of this summons;
(10)any documents and/or correspondence showing Beijing’s title to assets that are considered to have a market value of at least $5,000 as at 4 February 2006;
(11)any documents and/or correspondence showing Beijing’s acquisition, purchase or receipt of any assets that are considered to have a market value of at least $5,000 from 4 February 2006 to the date of this summons; and
(12)any documents and/or correspondence showing Beijing’s interest in any asset with a market value of at least $5,000 from 4 February 2006 to the date of this summons.

THE OBJECTIONS TO THE SUMMONSES

On the return of the summons, Ms Belaj said that “No such books, documents or things exist” of the sort described in (3), (4), (5), (6), (9) and (12) of the previous paragraph. She produced documents in response to the summons described in the remaining six paragraphs but objected to doing so. Her objections took three forms:
(1)response to (1) and (2) in respect to the summons addressed to Phoenix and (7) and (8) addressed to Beijing – that part appearing in (1) and (2) only is underlined and that in (7) and (8) only is in square brackets:
“These documents sought from Phoenix [Beijing] go back over six years and contain confidential information of a financial nature. Mr Phillips has had no connection with Phoenix since on or about mid 2009. Mr Phillips was paid wages from mid February 2006 to mid February 2009. [Beijing except for his payment of accommodation rental monies.] Mr Phillips [sic] past involvement with Phoenix [Beijing] is relatively insignificant in the context of the documents sought. This category is too wide and it would be an abuse of process for these documents to be produced having regard to the confidential information which they contain. These documents are irrelevant to the subject matter. The Applicant is using the summons to produce documents as an opportunity to collect these documents for a purpose other than for a pending trial and or ‘going on a fishing expedition’.”[37]

(2)response to (10) and (11) in respect to the summons addressed to Beijing:
“These documents sought from Beijing contain confidential information of a financial nature. These documents are irrelevant to the subject matter. This category would be an abuse of process for these documents to be produced having regard to the confidential information which they contain. The Applicant is using the summons to produce documents as an opportunity to collect these documents for a purpose other than a pending trial and or ‘going on a fishing expedition’.”[38]

[37] Letter from Mr Frank Sanna dated 4 May 2011 at 1 and 2

[38] Letter from Mr Frank Sanna dated 4 May 2011 at 3

Putting aside the response that no documents are held, there are six grounds inherent in these two formulation of them. They are that:
(1)the documents are confidential;
(2)the documents are irrelevant to the issues raised by the review of the Inspector-General’s decision;
(3)Mr Phillips’ connection with Phoenix and Beijing is limited to his past employment in relation to the former and his paying rent in relation to the latter;
(4)Mr Phillips’ past involvement with Phoenix and Beijing is relatively insignificant in the context of the documents sought;
(5)the documents are sought for a purpose other than the review of the Inspector-General’s decision;
(6)the summons is a fishing expedition; and
(7)requiring production would be an abuse of process.

CONSIDERATION

Summonses

In Cosco Holdings Pty Ltd v Commissioner for Taxation[39] (Cosco), Spender J approved the approach taken by the Tribunal in applying the principles applicable to subpoenas duces tecum issued by courts to summonses for the production of documents under the Administrative Appeals Tribunal Act 1975 (AAT Act). That approach is consistent with the Tribunal’s being based on the judicial model[40] so that its members are required “to act judicially, that is to say, with judicial fairness and detachment”.[41] The tools given to the Tribunal by the Parliament are consistent with those given to courts. With that in mind, I considered the analysis given by Spender J to summonses in Cosco in Re General Merchandise and Apparel Group P/L and Chief Executive Officer of Customs[42] (General Merchandise). I also went beyond his Honour’s consideration to the wider circumstances in which a court may set aside a subpoena in whole or in part. I did so in order to determine if there are any principles that may be drawn from them and applied to the exercise of the Tribunal’s discretion to refuse a request by a party to issue a summons having regard, of course, to the particular circumstances in which the Tribunal exercises its power. I adopt my analysis in that case.[43] The following two sections of my reasons are drawn from that analysis and focus on the general principles applicable in this case.
[39] [1997] FCA 1504
[40] Re Becker and Minister for Immigration and Ethnic Affairs [1977] AATA 12; (1977) 1 ALD 158; 15 ALR 696; at 161; 699 quoted with approval in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs [1996] HCA 18; (1996) 189 CLR 1 at 18 per Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ
[41] Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 24 ALR 577; 2 ALD 60 at 539; 68-69 per Bowen CJ and Deane J
[42] [2009] AATA 988; (2009) 51 AAR 1; 114 ALD 289
[43] [2009] AATA 988; (2009) 51 AAR 1; 114 ALD 289 at [205]-[245]

A.Subpoenas

In the usual case, a subpoena is issued without question and three steps are then taken:
“The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise. It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights, and the function of the judge differs.”[44]

In this case, I am concerned with the first and second steps.

[44] Waind and Hill v National Employers’ Mutual General Association Ltd [1978] 1 NSWLR 372 at 381 per Moffit P

In Re Trade Practices Commission v Kimberley Homes Pty Limited[45] (Kimberley Homes), Hill J considered whether the respondents, rather than the company subpoenaed, could move for the subpoena to be set aside. That is not an issue in this case but I note that Hill J began from the principle that:
“ It is a well-accepted rule that a subpoena may be set aside as oppressive and as an abuse of the process of the court if it requires the production of documents which are manifestly irrelevant to the issues between the parties. …”[46]
[45] [1989] FCA 262
[46] [1989] FCA 262 at [11]

In a much earlier case of Commissioner for Railways v Small,[47] Jordan CJ had put the proposition in slightly different terms.
“Where the subpoena is addressed to a party, it is still necessary that it should state with reasonable particularity the documents which are to be produced: … Even if the documents are specified, a subpoena to a party will be set aside as abusive if great numbers of documents are called for and it appears that they are not sufficiently relevant.”[48]
[47] (1938) 38 SR (NSW) 564
[48] (1938) 38 SR (NSW) 564, at 74

His Honour’s reference to the documents’ appearing “not sufficiently relevant” would suggest that the documents must be assessed and their weight determined in the first and second steps. The later authorities make it clear that this is not how the passage is to be read. King CJ, with whom both White and Millhouse JJ concurred, said in Hunt v Wark:[49] “… There must be some reason to suppose that the documents sought will be capable of being used ….”[50] Later, in Trade Practices Commission v Arnotts Ltd and Others (No. 2)[51] (Arnotts), Beaumont J formulated two questions that had to be answered. I set out his second at [36] below but his first was:
“Does the material sought have an apparent relevance to the issues in the principal proceedings, ie, is adjectival, as distinct from substantive, relevance established? Does the subpoena have a legitimate forensic purpose to this extent? This involves a consideration of the matter from the standpoint of Arnotts.”[52]
[49] (1985) 40 SASR 489
[50] (1985) 40 SASR 489 at 493
[51] (1989) 88 ALR 90
[52] (1989) 88 ALR 90 at 103 and see further [35]-[36] below.

In Kimberely Homes, Hill J made it clear that the particular rule of relevance to which he referred is:
“12. … but an illustration of the wider rule that a subpoena will always be set aside if it is shown to be an abuse of the court’s process. The court has a real interest that its process be not abused …
…
16.      In Hamilton v Oades (1988-89) 85 ALR 1 at p11, Deane and Gaudron JJ said:
‘The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice … (This power) is not restricted to defined and closed categories … In this context injustice is not simply a question of the purpose or motive for which the relevant proceedings were instituted but includes a consideration of the consequences of the proceedings for the person invoking the power.’
17.      The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously and unfairly burdensome, prejudicial or damaging’, and ‘productive of serious and unjustified trouble and harassment’’ Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 62 ALJR 389 per Deane J at 411; 79 ALR 9 at 45.
18.      In my view, once it is accepted that the court has inherent jurisdiction to prevent an abuse of its process it must follow that a party to proceedings before the court is entitled to move the court in respect of some action that has been taken by another party where it is alleged that that action constitutes an abuse of the Court’s process and it is accordingly appropriate that the Court be moved by way of a motion, notice of which is to be given to those affected by it.”

In Arnotts, Beaumont J outlined two different aspects of the concept of an abuse of process:
“ The general test for present purposes is well settled. The issue of a subpoena will be an abuse of process if it is not used for a legitimate forensic purpose: see Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 at 100-1. But, as Deane and Gaudron JJ observed in Hamilton v Oades (1989) 85 ALR 1 at 11, the court’s general powers in this area have a dual aspect: “The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice … [This] power … is not restricted to defined and closed categories … In this context injustice is not simply a question of the purpose or motive for which the relevant proceedings were instituted but includes a consideration of the consequences of the proceedings for the person invoking the power. …”[53]
[53] (1989) 88 ALR 90 at 102

Referring to the passage cited by Hill J from Oceanic Sun Line Special Shipping Co Inc v Fay,[54] Beaumont J went on to add:
“ In other words, the present inquiry is not limited to an analysis of the true purpose of Arnotts in procuring the issue of the subpoena. It is also material to look at the impact of the subpoena upon Mattingly [Pty Ltd].”[55]

It was to this aspect of the enquiry that his Honour’s second question was addressed in Arnotts. That was the question:

“Is the subpoena seriously and unfairly burdensome or prejudicial? This is to look at the matter from the point of view of Mattingly.”[56]

[54] [1988] HCA 32; (1988) 165 CLR 197; 79 ALR 9; 62 ALJR 389

[55] (1989) 88 ALR 90 at 102

[56] (1989) 88 ALR 90 at 103

In a judgment delivered five years earlier, Powell J set out specific examples of the situations in which a court will set aside a subpoena. He did so in Botany Bay Instrumentation & Control Pty Ltd v Stewart.[57] His Honour’s examples all relate to the second question posed by Beaumont J in Arnotts. Powell J said:
[57] [1984] 3 NSWLR 98
“… a reference to the authorities makes it tolerably plain that the court will exercise its undoubted jurisdiction to set aside a subpoena in a variety of cases, as, for example:
1.unless the subpoena was issued for the purpose of a pending trial, hearing or application …
2.where to require the attendance of a witness would be oppressive …
3.where the subpoena had not been issued bona fide for the purpose of obtaining relevant evidence and the witness to whom the subpoena had been addressed was unable to give relevant evidence …
4.where the subpoena has been used for the purpose of obtaining discovery or further discovery against a party …
5.where the subpoena has been used for the purpose of obtaining discovery against a third party…
6.where to require a party to comply with a subpoena to produce documents would be oppressive …
7.where the subpoena has been issued for a purpose which is impermissible, as, for example, “fishing” ...”[58]

This summary was accepted by Beaumont J in Trade Practices Commission v Arnotts Limited (No 2),[59] Conti J in Mandic v Phillis[60] and Flick J in Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia.[61]

[58] [1984] 3 NSWLR 98 at 100-101; citations omitted

[59] (1989) 88 ALR 90 at 102

[60] [2005] FCA 1279; 225 ALR 760 at [33]; 771 to 772

[61] [2009] FCA 1203 at [20]

These examples take into account considerations relating to the parties and to the person named in the subpoena. It seems to me that, in looking at what amounts to an abuse of process, more recent authorities have taken a perspective that extends beyond that of the person requesting the issue of the subpoena and that of the person required to comply with its terms if it were issued. It has extended its perspective to the effect on the proceedings themselves and the perception that right-thinking people might have of them. In Commonwealth of Australia v Albany Port Authority,[62] the Court of Appeal (WA) considered whether an order made by a Judge on his own motion setting aside subpoenas as abuse of process had been properly made.
[62] [2006] WASCA 185

In deciding that it had not, both Steytler P and Pullin JA considered the concept of abuse of process and its parameters. Both agreed that what amounts to an abuse of process cannot be exhaustively defined.[63] Referring to abuse of process generally rather than simply in the context of a subpoena, Steytler P said in part:
“… There is no doubt as regards the accuracy of this last proposition. In Walton v Gardiner (1993) 177 CLR 378 at 393, Mason CJ, Deane and Dawson JJ, speaking in the context of the power to stay proceedings as an abuse of process, said that the jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536 as ‘the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right‑thinking people’. …”
…
In R v Carroll (2002) 213 CLR 635 at 657 [73], Gaudron and Gummow JJ said that ‘the circumstances in which proceedings will constitute an abuse of process cannot be exhaustively defined and, in some cases, minds may differ as to whether they do constitute an abuse’. (See also Batistatos [V Roads & Traffic Authority of New South Wales (2006) 80 ALJR 1100] at [7] and [9]). What is clear, however, is that the concept extends to proceedings that are ‘seriously and unfairly burdensome, prejudicial or damaging’ (Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247); ‘productive of serious and unjustified trouble and harassment’ (Oceanic Sun Line, ibid; Hamilton v Oades (1989) 166 CLR 486 at 502 and Ridgeway v The Queen (1995) 184 CLR 19 at 74 ‑ 75); invoked for an illegitimate purpose (Rogers v The Queen (1994) 181 CLR 251 at 286 per McHugh J); or such as to ‘bring the administration of justice into disrepute’ (Rogers, ibid): see, generally, Batistatos at [14] ‑ [15]. It is also clear that, while many cases of abuse arise from the institution of proceedings, any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court's process: Rogers, ibid, and Batistatos at [15].”[64]
[63] [2006] WASCA 185 at [22] per Steytler P and [83] per Pullin JA
[64] [2006] WASCA 185 at [20]-[21]

What their Honours refer to as an abuse of process appears in other contexts to be described as oppressiveness. What amounts to oppressive is not something that can be defined with particularity but examples of oppressiveness can be drawn from the cases. So, for example, a subpoena drawn in very wide terms requiring“…the Police to search every Police station in New South Wales to determine whether any of the very broad categories of documents listed in the 27 paragraphs [of the subpoena] are within the possession, custody or control of any police officer …” was found to be oppressive.[65] Language used in the subpoena that is unclear and embarrassing leads to the same conclusion.[66]
[65] Marsden v Amalgamated Television Services Pty Limited [1999] NSWSC 619 at [255] per Levine J
[66] [1999] NSWSC 619 at [258] per Levine J

Confidentiality of the document sought is a factor to be considered in the context of oppression. In Dorajay Pty Ltd v Aristocrat Leisure Ltd,[67] Stone J said that “… the confidentiality of documents sought by subpoena is a relative but not determinative issue in considering if a subpoena should be set aside …”.[68] She cited two authorities, one of which was Spatialinfo Pty Ltd v Telstra Corporation Ltd,[69] in which Sundberg J said:
“… [I]n determining whether a subpoena operates oppressively, it is appropriate to take into account a confidentiality claim. In Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 at 380-381 the Full Court of the Supreme Court of Western Australia said: ‘... although, standing alone, confidentiality is not a ground for refusing to issue, or for setting aside, a subpoena, it is a factor which is to be taken into account, together with those tests for oppression which are determined by reference to the breadth of the subpoena, the definition of documents involved and the type and degree of burden placed upon those to whom the subpoena is addressed.’ The Court also referred to the existence of mechanisms for preserving confidentiality.”[70]
[67] [2005] FCA 588 at [34]
[68] [2005] FCA 588 at [36]
[69] [2005] FCA 455
[70] [2005] FCA 455 at [51]

Confidentiality can be related to privacy. It should be noted that a subpoena is issued to a stranger to the proceedings. A subpoena represents “the invasion … of the rights of a stranger”.[71] Those rights may be described in various ways but they essentially protect from disclosure information that a person, whether an individual, or a body corporate, may regard as confidential. In some circumstances, the law specifically protects information from disclosure but, putting aside those circumstances in which a court will set a subpoena aside, it does not provide a blanket protection against disclosure under a subpoena.
[71] Summers v Moseley [1834] EngR 320; (1834) 2 Cr & M 477 per Bayley B cited in National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 at 383-384 per Moffitt P with whom Hutley and Glass JJA concurred; Arnotts (1989) 21 FCR 306; 88 ALR 90 at 312; 98

The Privacy Act 1988 (Privacy Act) is an example. For the personal information of an individual or natural person, it provides some degree of protection from disclosure but that protection is not without qualification. A record-keeper, for example, is prohibited by Information Privacy Principles (IPP)[72] from disclosing that information to a person, body or agency or to the individual about whom the information is held unless one of the circumstances in IPP 11.1 arises. One of those circumstances is described in IPP 11.1(d) when it prohibits disclosure:
“the disclosure is required or authorised by or under law”.

If that record-keeper were named in and served with a summons issued under s 40(1A) of the AAT Act and did not raise an objection, that record-keeper would be required by law to disclose the information as required by the summons. His or her disclosure would be disclosure required by or under law in accordance with IPP 11.1.

[72] Privacy Act, s 14

B.The principles applying to the setting aside of summonses by the Tribunal

The principles I have set out in the preceding section of my reasons in relation to subpoenas apply equally to summonses issued by the Tribunal. The Tribunal’s power to issue a summons to obtain documents, books or things is given by s 40(1A) of the AAT Act. It is a discretionary power but, by its very nature as a statutory power, it cannot be an unfettered power. Its limits must be found in s 40(1A) specifically and in the AAT Act generally as well as in its subject matter and object as well as its underlying policy.[73] They are also found in the nature of the task that the Tribunal must perform. That task is sketched in the AAT Act but a more detailed description of it is to be found in various High Court and Federal Court authorities.
[73] Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265 at 375; 272 per Woodward J

Beginning with s 40(1A), the limitation on the power to issue a summons is express. It is given “for the purposes of the hearing of a proceeding before the Tribunal” and for no other. An application to the Tribunal for review of a decision is a “proceeding” within the meaning of the definition of that word in s 3(1) of the AAT Act. Although not frequently used to require the production of documents in relation to incidental applications such as an application for a stay of the decision under review, incidental applications are also “proceedings” under s 3(1). The power given by s 40(1A) would extend to a summons issued for the purposes of such incidental proceedings.[74] The application of s 40(1A) is extended by s 40(7) to enable it to be used for the purposes of a directions hearing or of an alternative dispute resolution process as if that directions hearing or alternative dispute resolution process were a proceeding before the Tribunal.
[74] AAT Act, s 40(7)

The power to issue a summons may not be used in the course of a proceeding for the purposes of obtaining documents that may assist one or more of the parties to the proceeding to pursue a collateral purpose. It may not be used in that way even if it is a purpose that bears a relationship to the decision being reviewed by the Tribunal but does not raise an issue that is reviewable. As it would be expressed by a court in the context of a subpoena, a summons must be issued in good faith, and so bona fide, for a purpose relevant to the review.

For the moment, I will consider only a summons issued for the purposes of hearing a proceeding that is an application for review of a decision. When hearing such an application, the Tribunal’s task is to review a decision made under an enactment. In doing so, it must identify the issues that the enactment requires it to decide or on which it must made a finding of fact. It must then consider the evidence and material which is probative so that it may make findings of fact on those. Having done that, it must work out the correct decision according to law and having regard to its findings of fact. If more than one decision is correct, it must identify the boundaries of the discretion it has to choose the correct decision and select one accordingly.

In taking these steps, the Tribunal must observe the rules of procedural fairness. The authorities gathered by Merkel J in VHAU of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs[75] are to the effect that the Tribunal must observe those rules. They are also to the effect that the Tribunal’s obligation to consider the issues raised by the material before it, does not mean that it must necessarily seek its own evidence or material or that it must require or permit the parties to seek all relevant evidence or material. Merkel J said:
“ It is well established that an inquisitorial tribunal, such as the Administrative Appeals Tribunal and the Refugee Review Tribunal, is entitled to be guided by the issues the applicant or any other ‘party’ chooses to put before it for its consideration and to have regard to the case put. As was said by the Full Court in Grant v Repatriation Commission [1999] FCA 1629 at [17] – [18]:
‘The AAT is entitled to be guided by the issues that the parties choose to put before it for its consideration (Sullivan v Department of Transport (1978) 20 ALR 323 at 342, Repatriation Commission v Hughes (1991) 23 ALD 270 at 274 and Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483 at 487-489) and is entitled to have regard to the case put (Noble v Repatriation Commission [1997] FCA 1159 at 16). In Bushell v Repatriation Commission (1992) 175 CLR 408 at 424-425 Brennan J said of the inquisitorial procedure of the AAT:
“Proceedings before the A.A.T. may sometimes appear to be adversarial when the Commission chooses to appear to defend its decision or to test a claimant's case but in substance the review is inquisitorial. Each of the Commission, the Board and the A.A.T. is an administrative decision-maker, under a duty to arrive at the correct or preferable decision in the case before it according to the material before it... The notion of onus of proof, which plays so important a part in fact-finding in adversarial proceedings before judicial tribunals, has no part to play in these administrative proceedings.”
An inquisitorial review conducted by the AAT, as with the Refugee Review Tribunal, is one in which the tribunal is required to determine the substantive issues raised by the material and evidence advanced before it and, in doing so, it is obliged not to limit its determination to the “case” articulated by an applicant if the evidence and material which it accepts, or does not reject, raises a case on a basis not articulated by the applicant: see Sellamuthu v Minister for Immigration and Multicultural Affairs [1999] FCA 247 at [23] and Satheeskumar v Minister for Immigration and Multicultural Affairs [1999] FCA 1285 at [15]).’
See also Chief Executive Officer of Customs v AMI Toyota Ltd (2000) 102 FCR 578 at 592-593.”[76]
[75] [2003] FCA 376
[76] [2003] FCA 376 at [18] The judgment of the High Court in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13; 29 ALR 289 may appear to be to the contrary when considering the role of the Australian Broadcasting Tribunal but regard must be had to the particular statutory provisions under which the ABT was required to conduct an investigation rather than to review a decision. The High Court concluded:

The principles in this passage are not qualified by s 25(4A) of the AAT Act. It provides that:
“The Tribunal may determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues that it considers.”

It may clearly do so but not to the extent that it excludes relevant questions of fact, relevant evidence or issues relevant to the review of the decision to which the proceedings relate. That this is the correct interpretation of s 25(4A) is supported by the Explanatory Memorandum to the Bill leading to the enactment of the Administrative Appeals Tribunal Amendment Act 2005 and the insertion of s 25(4A). It reads:

“Item 73 inserts a new subsection 25(4A) into the AAT Act. New subsection 25(4A) clarifies that the Tribunal will have the power to determine the scope of the review of a decision. The Tribunal would be able [to] do this by limiting the questions of fact, the evidence and the issues that it considers.
Parties often call upon the Tribunal to consider and/or make determinations on evidence or issues of law and fact that are not relevant to the decision that is under review. New subsection 25(4A) enables the Tribunal to dismiss a party’s request for the consideration of, and/or determination on, evidence or issues of law and fact which are not relevant. It is not intended that this section will allow the Tribunal to limit its own jurisdiction conferred by the Act or other legislation. For example, if the consideration of a legal issue is a threshold to the Tribunal affirming, varying or setting aside a decision, new subsection 25(4A) is not intended to give the Tribunal power to dismiss the consideration of such an issue.”

The matters to which I have referred in this section of my reasons are all relevant matters when considering whether to set aside a summons. In light of the judgment in Cosco, it must also be examined in light of the principles developed by the common law in relation to subpoenas and touched upon in the previous section. Therefore, the first question to ask is that asked first by Beaumont J in Arnotts i.e. whether the documents, books or things a summons seeks “…could reasonably be expected to throw light on some of the issues in the principal proceedings”.[77] The answer to that question determines whether the documents have adjectival or apparent relevance or sufficient relevance to the issues raised by the review of the decision that is the subject of the application for review. “It is not a question of looking at the documents to see if the documents might permit a case to be made.”[78] It is clear from the authorities that the relevance of the documents sought in the summons requested does not have to be established on the balance of probabilities. As Bennett J said in Comcare v Maganga:[79]
“… the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of issues in the proceedings …
Further, the test of relevance for the purpose of inspection is not confined to whether the documents in question will or may establish an inconsistent statement by a witness giving evidence in the proceedings or whether the documents themselves will prove a fact in issue. The Court may allow documents to be inspected if they are apparently relevant or are on the subject matter of the litigation … or if they might be used for a legitimate forensic purpose in cross-examination … ”.[80]
[77] [1997] FCA 1504 at [42] explaining the reference by Beaumont J in Trade Practices Commission v Arnotts Ltd and Others (No. 2) (1989) 88 ALR 90 at 103 to its being relevant to ask whether material had an apparent relevance to the issues in the principal proceedings and so an adjectival, as distinct from substantive, relevance established. Beaumont J had said: “The test of adjectival relevance is satisfied if the material has apparent relevance. In my opinion, the documentation called for here could possibly throw light on the issues in the main case. In my opinion, adjectival relevance is established.”
[78] [1997] FCA 1504 at [42]
[79] [2008] FCA 285; (2008) 101 ALD 68; 47 AAR 487
[80] [2008] FCA 285; (2008) 101 ALD 68; 47 AAR 487 at [37]-[38]; 76; 495

If the summons is essentially based on mere speculation that the person named in it has relevant material, its being seen as for the purposes of the hearing of a proceeding becomes more tenuous. Principles developed by the courts in relation to “fishing expeditions” when considering subpoenas will raise themselves for consideration. They are part of a wider group of principles developed by the courts to determine whether a subpoena is oppressive. Given that the person answering the subpoena is a stranger to the proceedings, the principles can be seen as tools to determine the proper balance between obtaining evidence and material to the issues between the parties in a matter and the burden imposed upon the recipient of the subpoena. Precisely the same balance must be achieved in deciding whether a request for a summons should be refused or, if issued, a summons should be set aside.

A fishing expedition has been described by Owen J in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd[81] in this way:
“A ‘fishing expedition’, in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not.”[82]

As “… There must be some reason to suppose that the documents sought will be capable of being used ….”,[83] a person who has no reason (other than mere conjecture) to suppose that another has such documents, will not be permitted to use a summons to find out. Expressing this principle in terms of s 40(1A) of the AAT Act, a request to issue a summons for a purpose of this sort will have grave difficulty in meeting the test that it be issued for the purposes of the hearing of the proceeding.

[81] (1952) 72 WN (NSW) 250

[82] (1952) 72 WN (NSW) 250 at 254

[83] Hunt v Wark (1985) 40 SASR 489 at 493

Nothing in s 40(1A) or elsewhere in the AAT Act gives the person so named the right or power to determine the books, documents or things to be produced by reference to their relevance or evidentiary value to the issues being decided by the Tribunal. The recipient must produce all books, documents or things described in the summons. In this regard, a summons is analogous to a subpoena duces tecum. It is distinct from an order for discovery which, although not specifically provided for in the AAT Act, could be made under s 33.[84] Having produced them, it is for the Tribunal to decide whether they have the required level of relevance, however that level is described e.g. as adjectival or apparent relevance or as being reasonably expected to throw light on some of the issues in the principal proceedings.
[84] “Discovery is the process by which a party obtains disclosure and production for inspection of documents relevant to the case. It demands a judgment by the party who must make discovery as to whether documents are relevant. The party who is required to make discovery must disclose all relevant documents whether or not they possess evidentiary value, and that party is required to make the judgment as to relevance. A subpoena, on the other hand, demands production for the purpose of the case of documents which are identified either specifically or at least generically.”: Carter v Hayes [1994] SASC 4477; (1994) 61 SASR 451; 72 A Crim R 387 at 454; 390 per King CJ with whom Bollen and Mullighan JJ agreed.

If adjectival relevance is present, the second question posed by Beamont J in Arnotts becomes relevant. That is whether the summons is seriously and unfairly burdensome or prejudicial. That is to look at the matter from the perspective of the person summoned who is Ms Belaj in this case. This was referred to by Spender J in Cosco and not discounted as a proper ground on which the Tribunal may rely. It is often addressed under the description of “oppression”. Much earlier, it had been accepted in one of its manifestations as a legitimate basis on which the Tribunal could refuse to issue a summons. In Pancontinental Mining Ltdand Others v Burns and Others,[85] von Doussa J said:
“58. In my opinion thesummonsinsofar as it sought documents or correspondence of or between ‘associated companies’ of Pancon or Rothschilds Australia Limited wasoppressive. The notion of an ‘associated company’ is capable of a range of meanings. As drawn, paragraphs 2, 3 and 4 of thesummonswould require Pancon to form a judgment as to what companies were ‘associated’, and this could in turn depend in part on a consideration of whether the activities of a particular company could be relevant to the issues raised in the applications for review. Only by forming this judgment could Pancon decide what documents it should produce. It isoppressiveto place upon a stranger to the proceedings an obligation to form a judgment as to what is relevant to issues in the substantive proceedings: Waind v Hill and National Employers’ Mutual General Association Ltd (1978) 1 NSWLR 372 at 382.”[86]
[85] [1994] FCA 1294; (1994) 124 ALR 471
[86] [1994] FCA 1294; (1994) 124 ALR 471at [58]; 491

In reaching this conclusion, von Doussa J applied one aspect of the law relating to subpoenas at common law and, in particular, relating to oppression, to a summons issued by the Tribunal. It would follow from his judgment and from that of Spender J in Cosco that the principles developed generally at common law in relation to oppression would apply. Therefore, the examples included in the extract from Botany Bay Instrumentation & Control Pty Ltd v Stewart at [37] above would be equally applicable in relation to a summons as to a subpoena.

The issues under review in these proceedings

The issues raised in the review of the Inspector-General’s decision clearly include those raised by the grounds of objection in s 149D(1)(b) and (da). Having regard to s 149N and the factors that appear uncontroversial,[87] I will need to consider:
[87] There is no suggestion by either party, for example, that a previous objection has been made on the ground in s 149D(1)(b) and has been cancelled.
(1) whether in the context of the ground of objection under s 149D(1)(b), there is sufficient or insufficient evidence to support a finding that, after the date of Mr Phillips’ bankruptcy, he:
(a)made or participated in making decisions that affect the whole, or a substantial part of the business of Phoenix; and/or
(b)exercised the capacity to affect significantly Phoenix’s financial standing; and/or
(c)communicated instructions or wishes (other than any advice he might have given in the proper performance of functions attaching to his professional capacity or business relationship with the directors or the corporation) to the directors of the corporation:
(i)knowing that the directors are accustomed to act in accordance with the person’s instructions or wishes; and/or
(ii)intending that the directors will act in accordance with those instructions or wishes; and
(2)if there is sufficient evidence in relation to one or more of the circumstances specified in (1)(a), (b) and (c), whether the reasons given for objecting on the ground in s 149D(1)(b) justify the making of the objection;
(a)that consideration will focus on whether objecting is consistent with the purpose of bankruptcy, the utility of the administration and the relevance of maintaining Mr Phillips’ bankruptcy having regard to those matters and the principles established by the Federal Court;[88]
(3)in the context of the ground of objection under s 149D(1)(da), which is a special ground, there is sufficient or insufficient evidence to support a finding that, after the date of Mr Phillips’ bankruptcy, he:
(a)intentionally provided false or misleading information to the trustee; and
(4)if there is sufficient evidence in relation to the circumstance specified in (3)(a), whether Mr Phillips has a reasonable excuse for engaging in that behaviour.
[88] See generally [14]-[18] above

The objections to the summons

It is against this background that I come to consider Ms Belaj’s objections to the production of the documents. I do not accept her objection on the basis that the documents are confidential. That, on its own, is not a basis on which to set aside a summons. A summons is, by its very nature, an invasion of the privacy of a person. It is an invasion condoned by the AAT Act for a purpose that is seen by Parliament as a more important purpose than the preservation of privacy. That purpose is the resolution of proceedings in the Tribunal. That is not to say, however, that, if a summons is not set aside on another ground, confidentiality is irrelevant. If it comes to pass that a document produced on summons is tendered and admitted in evidence at the hearing of a proceeding in the Tribunal, the Tribunal can be asked to make a confidentiality order restricting access to it. That order would be made under s 35 of the AAT Act but it should be remembered that an order will not be made as a matter of course. Any application that is made for such an order will have to be considered having regard to the requirement in s 35(3) that the Tribunal must take as the basis of its consideration the principle that it is desirable that hearings of proceedings be held in public and that documents received in evidence be available to the public. Section 35(2) also refers to the desirability of “documents lodged with the Tribunal” being made available to the public. Documents summonsed and produced to the Tribunal as a result are not “lodged” with it. Production is not lodgement.

The second ground of objection is that the documents are irrelevant to the issues that must be decided in reviewing the Inspector-General’s decision. I have set out the issues and the principles giving rise to them. This is not a time for deciding whether the documents produced under a summons will be relevant. It is the time for deciding whether they have apparent or adjectival relevance or whether they “…could reasonably be expected to throw light on some of the issues …”. In relation to both Phoenix and Beijing, the trustee referred to evidence he had relating to Mr Phillips’ involvement with both Phoenix and Beijing. The Inspector-General has addressed the evidentiary issues at further length in his Statement of Facts Reasons and Contentions lodged on 3 June 2010 and in his Supplementary Statement of Contentions dated 3 September 2010. He has referred to material that, on its face, suggests that Mr Phillips has acted on behalf of Phoenix and appeared to act on its behalf and to be the sole person acting on its behalf. On its own, the material raises the question whether he has done so in breach of s 206A of the Corporations Act. That is not to say that he has done so. It is only to say that the question is raised. It is a question on which the summonsed material may reasonably be expected to throw some light. It may on its face reveal some involvement by Mr Phillips or it may not. Either way, it is relevant to one of the issues that must be decided. It may show, for example, the significance, or otherwise, of projects on which Mr Phillips worked in the overall scheme of the work of Phoenix. Either way, that would be relevant.

The same can be said for his being paid a salary by Phoenix. The material in the form of his own statement, is that he was paid a salary but Ms Belaj’s response to the summons asking for group certificates is that no such books, documents or things exist. It may be that no documents going under the name of “group certificates” exist from 30 June 2004 for they have become known in more recent years as payment summaries or the like. Another summons in more broadly drafted terms can be issued in relation to them. Presumably, as Ms Belaj acknowledges that Mr Phillips has been paid some wages from 2006 to mid February 2009, the income tax returns, balance sheets or profit and loss statements, or some part of them, could reasonably be expected to throw some light on the issue of whether Mr Phillips was paid and the extent to which he was paid.

The trustee referred also to material indicating that Mr Phillips is the sole signatory to the BankWest account of Beijing and to material from Mr Phillips asserting to the contrary. This raises for consideration the question whether Mr Phillips was in breach of s 206A of the Corporations Act in relation to Beijing. This is not an issue that has been pursued to date. What has been pursued to date is what might have been Mr Phillips’ oversight in failing to mention that he has had access to Beijing’s bank statements. Without anything to suggest otherwise, it is reasonable to expect that those bank statements would have been available to him as the signatory to the account. That opens the door to the question whether he had access to any other books and records of Beijing. The documents sought in the summons could reasonably be expected to throw some light on that issue. Whether they actually go to resolving the issue one way or the other is not a matter to be decided at this stage.

The documents sought by the Inspector-General may also reasonably be expected to throw some light on the other issues that the Tribunal will have to consider when reviewing his decision. Those other matters relating to the purpose, utility and relevance of maintaining Mr Phillips in bankruptcy. The documentary information that the Inspector-General seeks through the summons procedure has apparent relevance to whether there is utility and relevance in doing so. Their relevance lies not only in establishing the grounds of objection but in establishing this broader issue. A trustee is charged with administering the bankrupt’s estate. Although he or she has other means of obtaining information, full disclosure by the bankrupt of his or her financial affairs and assets is an important part of the process. Where a bankrupt fails to disclose them, extension of that person’s bankruptcy may be a means of encouraging compliance. The documents sought in relation to Beijing may point to whether there are other assets available to the creditors for distribution. That is a relevant issue in deciding whether continuing Mr Phillips’ bankruptcy will be likely to have some utility in enabling the trustee to gather in and administer his bankrupt estate.

I note that Mr Sanna referred in his submissions to the limited connection which Mr Phillips has had with Phoenix and Beijing. Whether he has or has not is an issue in contention on the hearing of Mr Phillips’ application. It would be premature to try to resolve that at a return of summons hearing and inappropriate to do so.

It will be apparent that I do not regard the summonses as lines cast by a trustee engaged in a fishing expedition. It is not a case in which the trustee is dragging the pool for the purpose of finding out whether there are any there or not. He has seen evidence of fish in the pool. Those fish are born of information which has been given by Mr Phillips and which has not been supported by information from third parties. Their presence supports a conclusion that there may be other fish in the pool that will, as I have outlined above, throw light on the issues relevant to the review of the trustee’s decision to file a notice of objection.

On behalf of Ms Belaj, Mr Sanna submitted that the documents identified in the summons are sought for a purpose other than those connected with the review of the Inspector-General’s decision in this Tribunal. This brings to mind the situation that prevails in a court in relation to documents produced to it under compulsion. In Hearne v Street,[89] Hayne, Heydon and Crennan JJ said:
“Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise …, to disclose documents or information, the party obtaining the disclosure cannot, without leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery …, answers to interrogatories …, documents produced on subpoena …, documents produced for the purposes of taxation of costs …, documents produced pursuant to a direction from an arbitrator …, documents seized pursuant to an Anton Piller order …, witness statements served pursuant to a judicial direction … and affidavits …”[90]
[89] [2008] HCA 36; (2008) 235 CLR 125; (2008) 248 ALR 609; 82 ALJR 1259; Gleeson CJ, Kirby, Hayne, Heydon and Crennan JJ
[90] [2008] HCA 36; (2008) 235 CLR 125; (2008) 248 ALR 609; 82 ALJR 1259 at [96]; 154; 632; 1276 (footnotes omitted)

The obligation is sometimes referred to as an implied undertaking. Gleeson CJ said that the implied undertaking was described as “… now better understood as a substantive legal obligation”.[91] The majority, Hayne, Heydon and Crennan JJ also spoke in terms of obligation.[92] The advantages of doing so were described by Hobhouse J in the earlier case of Prudential Assurance Co v Fountain Page:[93]
“ This undertaking is implied whether the court expressly requires it or not … It is now in reality a legal obligation which arises by operation of law by virtue of the circumstances under which the relevant person obtained the documents or information. However, treating it as having the character of an implied undertaking continues to serve a useful purpose in that it confirms that the obligation is one which is owed to the court for the benefit of the parties, not one which is owed simply to the parties; likewise, it is an obligation which the court has the right to control and can modify or release a party from.” [94]
[91] [2008] HCA 36; (2008) 235 CLR 125; (2008) 248 ALR 609; 82 ALJR 1259 at [3]; 131; 612; 1262 per Gleeson CJ referring to the joint judgment of Hayne, Heydon and Crennan JJ at [108]; 160; 636; 1280 and see also per Kirby J at [56]; 145, 624, 1271
[92] [2008] HCA 36; 2008) 235 CLR 125; (2008) 248 ALR 609; 82 ALJR 1259 at [96]; 154-5; 631; 1276-7 (footnotes omitted)
[93] [1991] 3 All ER 878; 1 WLR 756
[94] [1991] 3 All ER 878; 1 WLR 756 at 885, 764

In adopting this passage, Hill J in Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd[95] went on to add:
“ The case makes clear that since the duty is owed to the court an injunction would issue to restrain a breach of the duty, which breach would constitute a contempt of court.” [96]
[95] (1994) 53 FCR 125; 124 ALR 493
[96] (1994) 53 FCR 125; 124 ALR 493 at 132; 501

The bases for both obligation and the qualification to it are found in the judgment of Mason CJ in Esso Australia Resources Ltd v Plowman:[97]
“… The implied undertaking is subject to the qualification that once material is adduced in evidence in court proceedings it becomes part of the public domain, unless the court restrains publication of it.
It would be inequitable if a party were compelled by court process to produce private documents for the purposes of the litigation yet be exposed to publication of them for other purposes. No doubt the implied obligation must yield to inconsistent statutory provisions and to the requirements of curial process in other litigation, eg discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation.” [98]
[97] [1995] HCA 19; (1995) 183 CLR 10; 128 ALR 391
[98] [1995] HCA 19; (1995) 183 CLR 10; 128 ALR 391 at 32; 403 per Mason CJ with whom Dawson and McHugh JJ agreed

In Re Rana and Military Rehabilitation and Compensation Commission,[99] I considered the extent and application of the obligation and its application in the Tribunal.[100] I will not repeat my analysis but adopt it as part of these reasons. I noted that Sundberg J decided in Otter Gold Mines Ltd v McDonald[101] that the obligation or implied undertaking extends to proceedings in the Tribunal in so far as documents are produced under compulsion. Compulsion, his Honour said, is the true basis on which the implied undertaking lies. That was the basis on which the documents in question had been produced to the Tribunal in the proceedings with which he was concerned as they had been, as in this case, produced under summons.
[99] [2009] AATA 361; 109 ALD 217; 50 AAR 191
[100] [2009] AATA 361; 109 ALD 217; 50 AAR 191 at [48]-[61]; 229-233; 204-207
[101] (1997) 76 FCR 467; 48 ALD 222; 147 ALR 322

Applying the principle in this case that would mean that, unless it is admitted in evidence and becomes part of the public record or unless the Tribunal gives leave to do so, nobody (be it the Inspector-General or the trustee or anybody else) may use the documents produced by Ms Belaj under the summonses for any purpose other than those connected with the review of the decision in this Tribunal.

In view of the conclusions that I have come to, I am not satisfied that the summonses amount to an abuse of process. They are directed to documents that have apparent or adjectival relevance and are not a fishing expedition. It is appropriate that I make an order permitting the parties to inspect the documents. As I have already said, whether or not all or any of the documents are admitted in evidence is the third step in the summons process and is yet to be taken.

I certify that the seventy preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,

Signed: .......................................................................
Leah Berardi, Associate

Date of Hearing  4 May 2011
Date of Decision  22 June 2011
Counsel for summonsed party      Mr F Sanna
ApplicantMr S Phillips
Solicitor for the Respondent         Ms F Spencer,
Blake Dawson

“ It follows from the provisions of s 25(1) that the Tribunal was under a statutory duty to make a thorough investigation into all matters relevant to the inquiry which it was holding pursuant to s 92F(4). It was therefore under a statutory duty to investigate the possibility that contraventions of the Act had taken place on the part of Control [Investments Pty Ltd] and those associated with it.

To discharge its duty the Tribunal must in an appropriate case investigate for itself the possibility of contravention, even in circumstances where there is no party before the Tribunal willing, anxious or able to pursue the issue. It will be noted that a party is given no right to compel the attendance of witnesses. It is for the Tribunal to decide who should be summoned before the Tribunal to give evidence and produce documents
(s 21(2)). The appearance of a party in an inquiry before the Tribunal alleging that there are, or may be, contraventions of the Act cannot qualify or modify the Tribunal’s statutory duty to inquire into relevant matters. By ruling that it would not inquire into contravention because the prosecutors were not calling legally admissible evidence, the Tribunal departed from its statutory responsibility.”

The reference to s 25(1) is a reference to that section in the Broadcasting and Television Act 1942 and, rather than providing that the ABT reach the correct or preferable decision as is the Tribunal’s role, it provided:

“(1) The Tribunal shall, without regard to the legal forms and solemnities, make a thorough investigation into all matters relevant to an inquiry under this Division, and may give all such directions and do all such things as the Tribunal considers are necessary or expedient for the expeditious and just hearing of the inquiry.

(2)The Tribunal is not bound by legal rules of evidence and may inform itself on any matter in such manner as it thinks fit.” (emphasis added); (1980) 144 CLR 13; 29 ALR 289 at 32; 303