Schiffer v Pattison
[2000] FCA 418
•5 APRIL 2000
FEDERAL COURT OF AUSTRALIA
Schiffer v Pattison [2000] FCA 418
PRACTICE AND PROCEDURE – appeal from Administrative Appeals Tribunal – application to strike out notice of appeal – original notice disclosed no question of law – under what circumstances leave to amend notice of appeal will be granted – litigant in person – pro bono counsel obtained after notice filed – whether proposed amendments disclose questions of law raised on tenable grounds – leave granted
Bankruptcy Act 1966 (Cth), s 149D(1)(e), (f), (n), s 149Q
Administrative Appeals Tribunal Act 1975 (Cth), s 43, s 44(1)Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 cited
Commissioner of Taxation (Cth) v Brambles Holdings Ltd (1991) 99 ALR 523 referred
Sullivan v Department of Transport (1978) 20 ALR 323 referred
Transport Accident Commission (Vic) v Bausch [1998] 4 VR 249 referredHORST DIETER SCHIFFER v PAUL PATTISON
V 490 of 1999KENNY J
MELBOURNE
5 APRIL 2000
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 490 of 1999
BETWEEN:
HORST DIETER SCHIFFER
ApplicantAND:
PAUL PATTISON
RespondentJUDGE:
KENNY J
DATE OF ORDER:
5 APRIL 2000
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The applicant have leave to amend the notice of appeal filed 25 August 1999 in accordance with the reasons for judgment delivered in this matter on 5 April 2000.
2.The applicant file and serve a draft of the proposed amended notice of appeal on or before 26 April 2000.
3.The further hearing of the notice of motion be adjourned to 9.30am on 3 May 2000.
4.A further directions hearing be fixed for 9.30am on 3 May 2000.
5.Costs be reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 490 of 1999
BETWEEN:
HORST DIETER SCHIFFER
ApplicantAND:
PAUL PATTISON
Respondent
JUDGE:
KENNY J
DATE:
5 APRIL 2000
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
This is an application to strike out a notice of appeal. The appeal is from a decision of the Administrative Appeals Tribunal of 20 July 1999 affirming a notice of objection to discharge the applicant’s bankruptcy. The relevant circumstances leading to the appeal may be summarised as follows.
Background facts
On 17 May 1995, the respondent was appointed trustee of the applicant’s bankrupt estate pursuant to s 156A(3) of the Bankruptcy Act 1966 (Cth) (“the Act”). On 10 November 1995, the trustee sent a “Notice of Assessment of Contributions for Contribution Assessment period 8 December 1994 to 7 December 1995”. This notice indicated that the applicant’s total assessed income for the relevant period was $74,665, on the basis of which the applicant was liable to pay a contribution of $24,583.50 to his estate. The amount of total income was not derived from specific documents in the trustee’s possession, but rather represented “Salary/Wages deemed reasonable according to the salary and wages of the Industry Group in the same field as [the applicant’s business] as deemed pursuant to Section 139Y of the Bankruptcy Act 1966”. The trustee relied upon deemed rather than actual income because of the bankrupt’s alleged failure to disclose sufficient information to enable a true assessment of his actual income and assets.
The applicant, Mr H D Schiffer, did not comply with the assessment. Instead, he applied to the Inspector-General for a review of the assessment under s 139ZA of the Act. He subsequently failed to respond to the Inspector-General’s request for further information and, so far as one can tell, nothing further happened on this review. Although the trustee has repeatedly drawn Mr Schiffer’s attention to his obligation to pay the assessed income contribution, Mr Schiffer has refused to pay it, contending that he never actually earned the income upon which the assessment was based.
Mr Schiffer was due to be discharged from his bankruptcy on 13 July 1999. On 7 July 1998, the trustee filed a notice of objection to discharge (“the first objection notice”), which had the effect of extending Mr Schiffer’s period of bankruptcy to 13 July 2003. The grounds for this objection were as follows:
The ground for my objection is contained in Section 149D(1)(e) that the Act, [sic] namely that the bankrupt failed to pay to the trustee an amount that the bankrupt was liable to pay under section 139ZG of the Act.
In addition, the bankrupt failed, to disclose any particulars of income or expected income as required by a provision of this Act referred to in Section 139U. The ground is that contained in Section 149D(1)(f) of the Act.
According to the notice, the trustee was unable to assess the bankrupt’s compulsory contributions for 1996 and 1997 because of the bankrupt’s failure to provide the requisite information about his income and assets.
After filing the first objection notice, the trustee became aware of the sale of a number of shares in AMP Limited (“AMP”) that generated about $39,000. The trustee claimed that Mr Schiffer owned these shares. Mr Schiffer, who stated that his wife had always owned them, disputed this. In any event, the alleged non-disclosure of this income formed the grounds for a second notice of objection to discharge dated 3 September 1998 (“the second objection notice”). This notice relied on s 149D(1)(n) of the Act.
Proceedings before the AAT
On 28 August 1998, Mr Schiffer lodged an application for review of the first objection notice with the Administrative Appeals Tribunal (“the Tribunal”). (Of course, the second objection notice had not yet been issued – a fact which will turn out to be of some significance.) The Tribunal heard the matter on 20 July 1999. Mr Schiffer was unrepresented at these proceedings. He gave evidence under oath. The Tribunal also had before it the “T” documents and two exhibits (a letter dated 19 August 1998 from AMP to the trustee and a letter dated 27 April 1999 from the trustee to Mr Schiffer). The Tribunal did not have the second objection notice.
The Tribunal delivered its judgment ex tempore at the end of the hearing. It reads, in full, as follows:
The overriding impression that has been given to us in this matter is the obvious antipathy of the applicant, Mr Schiffer towards his trustee Mr Pattison. Mr Schiffer has taken a particular view of the trustee. It is abundantly clear from Mr Schiffer’s evidence that he has no intention of making any payments towards the contribution assessment or of co-operating with his trustee generally. Objective evidence of this intention is to be found in the material lodged with the Tribunal. In addition Mr Schiffer’s responses to questions asked of him further illustrate the point that he does not intend to make payment of the income contribution, nor respond to requests for information by the trustee in relation to his income and property. Additionally the evidence also revealed Mr Schiffer has failed to disclose his interest in the AMP shareholding or adequately explain what happened to the proceeds of the sale of these shares.
In the result there is no satisfactory evidence before this Tribunal which would lead us to interfere with the decision under review. There are certain consequences which do flow from the position which you have taken Mr Schiffer and unfortunately for you is that you leave the Tribunal with no option other than to affirm the decision under review. The consequences of that of course is that your period of bankruptcy will continue until 13 July 2003 as the notice of objection indicates.
The parties’ contentions
In his notice of appeal from the decision of the Tribunal to this Court, filed on 25 August 1999, Mr Schiffer framed the question of law raised as follows:
[T]he ground on which the Trustee in Bankruptcy based his objection to discharge the Bankrupt, purportedly pursuant to section 149D(1)(e) of the Bankruptcy Act, namely that the bankrupt failed to pay to the trustee an amount that the bankrupt was liable to pay under section 139ZG of the Bankruptcy Act, was not valid and incorrect in law and should not have been accepted by the Tribunal.
In addition, the applicant stated that “[t]he amount that the Trustee in Bankruptcy stated that the Bankrupt was liable to pay ($24,583.50) was incorrect.”
On 15 October 1999, the trustee filed a notice of motion to strike out Mr Schiffer’s notice of appeal. The basis for this motion was that the appeal notice disclosed no question of law, as required by s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”). Further, in written submissions filed at the hearing of the motion in this Court on 2 February this year, counsel for the trustee submitted that:
The notice of appeal seeks to raise the issue of the validity of the income contribution assessment. The income contribution assessment was a question of fact to be determined by the Tribunal. The decision to issue a contribution assessment, and the amount of the contribution, were not decisions under review before the Tribunal. There is therefore no question of law raised on the Notice of Appeal.
In any event, the matters that Mr Schiffer sought to raise were, according to the trustee, questions of fact that were not amenable to appeal to this Court.
On the hearing of the motion, counsel for the trustee drew attention to the fact that the Tribunal proceeded on the basis that the decision under review was “a decision of your trustee in bankruptcy to file an objection to your discharge from bankruptcy”. That is, Mr Schiffer sought review under s 149Q of the Act, and not under s 139ZF of the Act. The Tribunal did not treat the prior decision to issue the contribution assessment as a decision under review. Indeed, the Tribunal apparently accepted the trustee’s submission that it was not open to it to do so. There was, so the trustee submitted in this Court, evidence before the Tribunal:
(a)That the respondent had sent an income contribution assessment to the applicant seeking a contribution of $24,583.50.
(b)That the assessment was not based on the actual income statement of the applicant but was deemed income applied by the respondent.
(c)The basis of the deemed income.
(d)That the applicant had received the assessment.
(e)That the applicant had sought a review of that decision by the Inspector-General but did not proceed with the review.
(f)That the applicant had not paid the contribution.
(g)That the applicant did not intend to pay the contribution amount tin the future.
(h)That the applicant was working in the family business and effectively managing it.
(i)That the family made the decision about the amount of the drawings available to the applicant.
(I omit the transcript references that the trustee also provided.) Bearing this in mind, it was plain, so said the trustee, that the Tribunal did not, in any event, make any error of law in affirming the trustee’s decision to lodge the first objection notice.
In preparing his notice of appeal and in the first half of the hearing on 2 February 2000, Mr Schiffer did not have the benefit of legal representation. In the course of the hearing, however, Mr Paul Norris of counsel, who was in Court on another matter at the time, offered to represent him on a pro bono basis. Mr Schiffer wisely accepted that offer. The Court too is grateful for Mr Norris’s assistance.
Counsel for Mr Schiffer has conceded that the original notice of appeal was deficient and disclosed no appealable question of law. That is plainly correct. It is said on Mr Schiffer’s behalf, however, that that is not an end of the matter, because the proceedings before the Tribunal are vitiated by a number of errors of law. As a result, Mr Schiffer opposes the trustee’s motion and seeks leave to amend his notice of appeal.
Briefly, the major error raised in Mr Schiffer’s further submissions is that the Tribunal displayed a lack of procedural fairness towards him. His counsel submitted that this was constituted by the Tribunal’s
(1) failure to grant him an extension of time in which to challenge the income contribution assessment (even though he had not requested such an extension);
(2) failure to identify “adequately and unambiguously” for him what decision was under review;
(3) failure to hear a review of the income contribution assessment in combination with the review of the first objection notice;
(4) failure to suggest that he might seek an adjournment to permit him to adduce additional evidence on the AMP shares issue; and
(5)failure to respond adequately to the trustee’s failure to identify clearly what evidence was being relied upon in the first objection notice.
Further, counsel for Mr Schiffer submitted that the Tribunal committed errors of law:
(6) in failing to consider whether there was a valid income contribution assessment upon which to base the first objection notice;
(7) in effectively hearing and determining the second objection notice, although that matter was not under review and was not before the Tribunal; and
(8) in failing to discharge its statutory duty to examine properly the first objection notice and the trustee’s reasons for exercising his discretion in filing the notice.
Finally, both parties made submissions about the effect of the second objection notice on the utility of the appeal.
As the situation currently stands, the parties agree that the trustee’s motion should be allowed unless the newly proposed grounds justify granting leave to amend the notice of appeal.
When should leave to amend a notice of appeal be granted?
The Court has power to strike out either the whole or part of a notice of an appeal from a decision of the Tribunal upon the basis that the notice does not disclose a question of law: see Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 519-520. It also has power to permit a question of law to be raised by amendment. Leave to amend is granted to enable justice to be done as between the parties and, in a case such as this, by permitting the court to examine any real questions of law that are raised in the matter. Whether an amendment to a notice of appeal from a decision of the Tribunal should be allowed depends, of course, on the circumstances of the case.
Mr Schiffer was unrepresented at the time he formulated and filed his notice of appeal. Plainly enough, litigants in person may be unable to identify in specific legal terms the legal error that has, in their view, been committed by the Tribunal and may indeed fail to appreciate the proper roles of administrative review and curial appeal altogether. In these circumstances, a court may be more forgiving of errors in formulating an appeal notice than it would be if a practitioner committed them. In this case, Mr Schiffer obtained legal representation mid-way through the hearing of the trustee’s strike out motion. He was fortunate in receiving it, and it is most unlikely that he could have received it any earlier. In Commissioner of Taxation (Cth) v Brambles Holdings Ltd (1991) 99 ALR 523 at 529, Sheppard J said that, in some circumstances, the Court may adopt a “more relaxed attitude” towards amendments when a party changes counsel; and, a fortiori, in the circumstances of this case. Certainly, the court should not discourage litigants in person from attempting to obtain representation in a matter such as this even after their appeal has been instituted. The presence of counsel at any stage improves the quality and efficiency of the administration of justice generally.
The trustee will, of course, incur costs in respect of what is, at it stands, a defective notice of appeal and, if Mr Schiffer’s application to amend is successful, yet more costs. It is possible that no costs order in his favour will compensate him, given the uncertain financial resources of the bankrupt and his estate. On the other hand, there is, as I have said, the interest in permitting a litigant to raise any real question of law that properly arises in the matter, especially where timely legal assistance to an initially unrepresented litigant permits that question to be identified. In this case, it is proposed that the appeal notice should be amended at an early stage in the proceeding. In the circumstances, there can be no suggestion that the defects in the original notice of appeal were done in bad faith. I would, in this case, grant the leave sought, providing the amendments raise questions of law upon tenable grounds.
Procedural unfairness
As noted above, Mr Schiffer now raises an allegation of procedural unfairness. Counsel for Mr Schiffer submits, first, that Mr Schiffer was denied procedural fairness because the Tribunal did not clarify the scope of its review, or advise him of his right to seek leave, out of time, for a review of the income contribution assessment. As the trustee points out, the Tribunal did indicate to Mr Schiffer early in the hearing that it understood that his application was for review of the first objection notice decision. Furthermore, during the course of the Tribunal’s questioning, it became clear that Mr Schiffer had applied earlier for a review of the contribution assessment by the Inspector-General, but that he had not provided the information sought by the Inspector-General for the review.
The trustee submitted, however, that, by the time of the hearing, the evidence showed that Mr Schiffer must have been well aware of what needed to be done to contest the contribution assessment decision. (As the trustee pointed out, on 7 October 1998, the Tribunal granted “an extension of time in which to lodge the application for review” lodged by Mr Schiffer on 28 August 1998.) Mr Schiffer was, so the trustee submitted, given an adequate opportunity to present his case as he wished, and he did not seek an adjournment.
It is at least arguable that the Tribunal did not adequately explain its role and the scope of the matters that were before it at the time of the hearing, in terms comprehensible to a litigant in person. Mr Schiffer contended that the Tribunal questioned him on certain matters that could only have been relevant to the contribution assessment. If this can be shown, it may indicate that the Tribunal in effect held out to him that the assessment contribution was in fact under review, though I express no settled view on the matter. In short, it is at least arguable that Mr Schiffer was labouring under a reasonable misapprehension about the purpose of the Tribunal hearing. The consequences of this are again a matter for further submission. For example, Mr Schiffer may have been led to focus on irrelevant considerations at the hearing to the detriment of the rest of his case, and may have been led not to seek formally leave out of time to apply for review of the contribution assessment. As counsel for Mr Schiffer submitted, “Mr Schiffer presented the case through his evidence as he would for a review of the income assessment.” Under these circumstances, it cannot be said that the assertion by Mr Schiffer of a legal duty on the Tribunal’s part to raise squarely for him issues regarding the reviewability of the contribution assessment, even without being prompted to do so, is untenable.
The applicant next takes issue with the fact that the Tribunal did not advise him of the possibility of seeking an adjournment of the hearing. This point arises out of a dispute about the ownership of a number of AMP shares. The trustee says that documents relating to this issue were relied on in cross-examination of Mr Schiffer in response to his statements that he was unable to pay the contribution assessment. He was confronted during cross-examination with the proposition that he owned the shares which he had sold without disclosing the proceeds to the trustee. The trustee’s representative tendered several letters, which were not part of the Tribunal’s “T” documents, to show that Mr Schiffer owned the shares. Mr Schiffer’s evidence was that his wife had paid for the policy that generated the shares and, accordingly, that she owned them. He was unable to present any additional evidence on the point. Mr Schiffer claimed that, because there was no notice that the AMP shares issue would be raised at the hearing on 20 July 1999, the Tribunal should have told him at the hearing that he might seek an adjournment in order to seek evidence in support of his position. It is to be borne in mind, of course, that Mr Schiffer never said that there was any other evidence to corroborate his account. Plainly enough, however, the books of account of the company that paid the premiums and the evidence of Mrs Schiffer might have thrown further light on the matter. Referring to Sullivan v Department of Transport (1978) 20 ALR 323, the trustee conceded that:
The failure of a tribunal, which is under a duty to act judicially to adjourn a matter, may conceivably, constitute a failure to allow a party the opportunity of properly presenting his case even though the party in question has not expressly sought an adjournment.
Whether, in the circumstances, the Tribunal was bound, as a matter of law, to grant an adjournment or to tell Mr Schiffer that he might make an adjournment application is a matter that might be agitated on the appeal. It is enough at this stage to say that the submission made by Mr Schiffer’s counsel is not utterly without merit.
Consideration of irrelevant material and jurisdiction
As we have seen, the trustee did not know of the issue of ownership of the AMP shares before the first objection notice was filed. Mr Schiffer has not, it seems, filed an application for review of the second objection notice with the Tribunal. A review of the transcript gives no indication that the Tribunal was aware that there was a second objection notice. It was, of course, the second objection notice that relied on Mr Schiffer’s alleged failure to disclose the profits from the AMP share sale as a ground for objection. In its reasons for its decision, however, the Tribunal made a finding that “Mr Schiffer has failed to disclose his interest in the AMP shareholding or adequately explain what happened to the proceeds of the sale of these shares”. The Tribunal relied upon this as an additional consideration leading it to affirm the decision on the first objection notice. Counsel for Mr Schiffer contested the relevance of the share sale to the decision under review since the second objection notice was not before the Tribunal. Counsel submitted that the trustee’s (and the Tribunal’s) questioning of Mr Schiffer about the AMP shares in cross-examination had led the Tribunal to give erroneous consideration to an irrelevant issue. In response, the trustee contended that the Tribunal was entitled to consider the matter even though it arose after the decision under review, because, pursuant to s 43(1) of the AAT Act, the Tribunal could, on review, exercise the powers conferred by s 149B(2) and s 149J of the Act just as the primary decision-maker could have done. The AMP shareholding issue was, so the trustee submitted, a relevant consideration on account of the grounds of objection specified in the first objection notice, bearing in mind that the Tribunal had the discretion referred to in s 149J. Whilst there is merit in the trustee’s response, it again seems to me that Mr Schiffer’s claim is capable of raising a question of law on tenable grounds.
Mr Schiffer contended that there was error in the “effective hearing and determination of the substantive issues of the second notice”, given that the second objection notice was not before the Tribunal and that he had no opportunity to deal with the case against him on that notice. In support of this contention (which may turn out to be simply another way of stating the previously mentioned claim) his counsel referred to Transport Accident Commission (Vic) v Bausch [1998] 4 VR 249. The trustee submitted that Bausch should be distinguished, because it concerned a document, critical to the appeal process, relied on by the primary decision maker and withheld from the review tribunal. Leaving Bausch aside for a moment, Mr Schiffer’s complaint that the Tribunal erred in dealing with the substance of the second objection notice (though knowing nothing about that notice) may raise a question of law and a ground for review. Again, I say nothing more about the merits of the claim.
The failure of the Tribunal to discharge its statutory task
Mr Schiffer’s complaint about the inadequacy of the first objection notice can be read as a complaint (1) that the notice failed to satisfy the requirements of s 149C of the Act; and (2) that the Tribunal failed to satisfy itself (as it was by law required to do) that the grounds relied on by the trustee were made out on the evidence and that, as a matter of discretion, the objection to the bankrupt’s discharge from bankruptcy should be affirmed. This, so it seems to me, is capable of raising a question of law on tenable grounds.
Other claims
Mr Schiffer also took issue with the fact that the evidence in support of the trustee’s second ground – the bankrupt’s alleged failure to provide certain information – was not directly referred to at any stage of the hearing before the Tribunal. The first objection notice contains a list of letters and requests that the trustee says went unanswered or were met with substantial non-compliance. The Tribunal held that “[o]bjective evidence of this intention [not to co-operate with the trustee] is to be found in the material lodged with the Tribunal”. That finding of fact was, plainly enough, open to the Tribunal on the evidence before it. This complaint does not raise any question of law and, even if it were recast to raise such a question, it would be unlikely to succeed.
The trustee submitted that the Act, in ss 149A and 149H, “provides for there being alternate grounds of objection that operate independently of each other”, and that:
the second Notice of Objection did not supersede the first Notice of Objection. It provided another ground of objection.
The second objection notice was, so the trustee said, irrelevant to the decision before the Tribunal and, even if the first objection notice were set aside, the second notice would still stand. The second objection notice was not, so the trustee said, relevant to the appeal that Mr Schiffer sought to bring. Counsel for Mr Schiffer contended, however, that the second objection notice “was of no effect because it was incapable of extending the bankruptcy based on the ground set out therein” and that it was “meaningless at law”. The situation in this case was, he said, “entirely different from that where there are multiple grounds of objection contained within the one Notice of Objection filed on a date preceding the date of statutory discharge from Bankruptcy”. The second objection notice does not, on this analysis, survive and, in consequence, the outcome of the appeal is a matter of some moment to Mr Schiffer. I do not express a view on these competing submissions. It seems to me that enough had been said to show that Mr Schiffer seeks to raise at least one or more questions of law on tenable grounds.
Conclusion
The questions that Mr Schiffer now seeks to agitate may or may not run into difficulty at the hearing of the appeal, but at this stage I am not prepared to say that none are arguable. In the circumstances, I would direct that the supposed question of law presently set out in the notice of appeal and the two lines beside the word “grounds” be struck out. I would otherwise grant Mr Schiffer leave to amend his notice of appeal, providing that he first file and serve a draft amended notice of appeal formulated in accordance with these reasons for judgment. I would otherwise dismiss the trustee’s motion only when I am satisfied that Mr Schiffer has filed and served an appropriately amended notice of appeal.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate:
Dated: 5 April 2000
Counsel for the Applicant: Self represented until 12 noon then represented pro bono by Mr P Norris Solicitor for the Applicant: Self represented Counsel for the Respondent: Ms A Wardell Solicitor for the Respondent: Home Wilkinson & Lowry Date of Hearing: 2 February 2000 Date of Judgment: 5 April 2000
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