Rutherfurd and Inspector-General in Bankruptcy

This matter concerned an application by David Rutherfurd for a review of a decision by the Inspector-General in Bankruptcy to refuse to review income contribution assessments made by a trustee under the *Bankruptcy Act 1966* (Cth). Mr Rutherfurd had requested the Inspector-General to review the trustee's assessments for the first four years of his bankruptcy, but the Inspector-General declined to do so, citing insufficient reasons under section 139ZA(1)(b) of the Act. The Administrative Appeals Tribunal was asked to determine, as a preliminary question, whether it possessed the power to review the trustee's original income contribution assessment if it set aside the Inspector-General's decision not to review.

The central legal issue before the Tribunal was the scope of its review powers when considering an application to set aside a decision by the Inspector-General to refuse a review of a trustee's income contribution assessment. Specifically, the Tribunal had to determine if, upon setting aside the Inspector-General's refusal, it could then proceed to conduct a review of the trustee's initial assessment, or if its power was limited to reviewing only the Inspector-General's decision. The parties agreed that the question was one of the Tribunal's "power" rather than its "jurisdiction" in the strict sense.

The Tribunal reasoned that the *Bankruptcy Act* and the *Administrative Appeals Tribunal Act 1975* (Cth) did not grant it the power to make an income contribution assessment when reviewing a decision by the Inspector-General to refuse such a review. While the Tribunal could set aside the Inspector-General's decision and substitute a decision permitting a review, this would oblige the Inspector-General to conduct the review. The Tribunal's role, in this context, was not to substitute its own assessment for that of the trustee, but rather to ensure that the administrative process, including the Inspector-General's decision on whether to review, was conducted lawfully and in accordance with the Act's purpose, which favoured review only where sufficient reasons existed.

Ultimately, the Tribunal concluded that it did not have the power to make a fresh income contribution assessment when reviewing a decision by the Inspector-General in Bankruptcy refusing to review a trustee’s income contribution assessment. The practical consequence was that if the Inspector-General's decision was set aside, the matter would be remitted to the Inspector-General to conduct the review, preserving Mr Rutherfurd's right to have the trustee's assessment reviewed by the Inspector-General.