The Estate of Joseph Wenceslaus Gomez and the Inspector-General in Bankruptcy

[2008] AATA 914

Administrative Appeals Tribunal

DIRECTION AND REASONS FOR DIRECTION [2008] AATA 914

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0899

GENERAL ADMINISTRATIVE  DIVISION		)
Re		THE ESTATE OF JOSEPH WENCESLAUS GOMEZ

Applicant

And THE INSPECTOR-GENERAL IN BANKRUPTCY

Respondent

DIRECTION

Tribunal Mrs Josephine Kelly, Senior Member

Date13 October 2008

PlaceSydney

Decision I set aside the summons, issued to Mr Mark Robinson, the Trustee in Bankruptcy, at the request of the Applicant, dated 16 July 2008.   There is no order as to costs.

..................[sgd]...........................

Senior Member
  Mrs Josephine Kelly

CATCHWORDS

PRACTICE AND PROCEDURES – Summons to produce documents – Issued at Applicant’s request - Application to set aside – Whether recipient “stranger” to proceedings - Whether summons oppressive – Held summons too wide and oppressive - Held obligation on recipient too onerous – Held no power to award expenses or costs for summons to produce documents – Summons set aside

Administrative Appeals Tribunal Act 1975, ss 40(1A), 67

Bankruptcy Act 1966, s 149N

Administrative Appeals Regulations 1976, s 16, Schedule 2

Cosco Holdings Pty Ltd v Federal Commission of Taxation (1997) 37 ATR 432

Pancontinental v Burns (1994) 34 ALD 239

Re Boyle and Commissioner of Taxation [2005] AATA 584

Re Medtest Pty Ltd and Medicare Participation Review Committee (2003) 76 ALD 788

Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710

Waind v Hill and National Employers' Mutual General Association Ltd [1978] 1 NSWLR 372

REASONS FOR DIRECTION

13 October 2008 Mrs Josephine Kelly, Senior Member      

1.      The Estate of Joseph Wenceslaus Gomez (the Estate) seeks the review of a decision made by a delegate of the Inspector-General in Bankruptcy (the Inspector-General) to confirm the objection to discharge filed by the Trustee in bankruptcy of the Estate, Mr Mark Robinson (the Trustee), and to declare that the bankruptcy will remain extended by 8 years to 18 May 2012. Dr Gomez became bankrupt on 20 April 2004.

2.      The question I am determining relates to a summons issued by this Tribunal at the request of the Estate, to the Trustee.  The Trustee, who is not a party to the proceedings, seeks to have the summons set aside and an order for costs made in his favour.

THE ISSUES

3.      The principal issue is whether there are grounds to set aside paragraphs (2), (3) and (5) of the summons.  If the Trustee is successful on this issue, the secondary issue is whether he is entitled to costs.

THE SUMMONS

4.      The summons, issued by the Tribunal on 17 July 2008, sought production of “the following books, documents or things”:

1) The originals of the Statement of Affairs dated 18/05/2004 to be produced to the court and retained by the registry until further order of the court.

2) Any files notes, correspondence, emails, notes, memos, electronic documents, documents relating to Dr Gomez’s Statement of Affairs dated 18/05/2004.

3) Any correspondence, file notes, emails, memos etc between Insolvency and Trustee Services Australia (ITSA) and Trustee in bankruptcy (PPB) relating to Dr Gomez.

4) Any internal communications, notes, emails, memos and relating to Dr Gomez.

5) correspondence, file notes, emails, etc with debtors and creditors listed therein.

5.      The Estate accepts that the Trustee has validly answered the first paragraph of the summons. The document is not in his possession, custody or control.  The Estate did not press paragraph 4. 

6.      I received written submissions on behalf of the Estate and the Trustee.  The solicitors for both the Estate and the Trustee advised that they were content for me to decide the matter on the papers.

THE CASE FOR THE ESTATE

7.      The Estate argued that the Trustee is not a "stranger to the proceedings", as that term has been used in the authorities.  Following is a summary of the Estate's argument in relation to each paragraph. 

8.      The documents sought by paragraph 2 were relevant to the proceeding and were stated with reasonable particularity.  The request was not oppressive, the documents were readily identifiable, the number of documents was not burdensome:

but (were) documents falling within one particular file which will assist the Tribunal in determining the matter before it .

9.      The same arguments were put in relation to paragraph 3.  In addition, it was asserted that the Trustee's solicitor had made the following concession in correspondence annexed to the Outline of Submission document:   does not deny that the category seeks irrelevant documents.   It followed that I should apply what was said to be the principle stated in Re Medtest Pty Ltd and Medicare Participation Review Committee, that, where material sought may be of relevance and its production not oppressive, the better course is for the Tribunal not to exercise its discretion to refuse to issue a summons. The Estate also argued that the Trustee's suggestion that the paragraph be recast to refer to correspondence between the Trustee and the Insolvency and Trustee Service of Australia in relation to the discharge in a specific period, "belies" the Trustee's objection to the paragraph on the grounds of relevance and oppression.   I understood that the Estate accepted that the Tribunal has power to recast the paragraph.

10.     The same arguments put in relation paragraph 2 were repeated in respect of paragraph 5 of the summons.  The submission also stated that the correctness of the objection relates directly to the debtors of the Estate and the information supplied to the Trustee regarding them.  It was also submitted that the information is also patently relevant to whether the Estate has a reasonable excuse for providing the information.   The submission on this paragraph also asserted that the Trustee was taking a:

wilfully obstructionist approach to the summons, which screams of a lack of bona fides.

CONSIDERATION

11. Section 149N of the Bankruptcy Act 1966 (the Act) sets out the requirements of the review undertaken by the Inspector-General of a decision by a trustee to lodge an objection to discharge. The Inspector-General upheld the Trustee's objection that the Estate had intentionally provided false and misleading information to the Trustee in respect of the Statement of Affairs and in respect of the claim for dependants, and that the Estate had not established a reasonable excuse in either case.

12. There was no dispute that the principles that apply to subpoenas for production of documents issued by Courts apply to summonses for production of documents issued by the Tribunal pursuant to s 40(1A)(c) of the Administrative Appeals Tribunals Act 1975 (the AAT Act).

13.     In my view, the three paragraphs of the summons in issue are poorly drafted and require various assumptions to be made to work out what is intended. For example, in paragraph (2) there seems to be an "and" missing before "documents" where that word appears for the second time, and a comma missing after that word.  I assume that "therein" in paragraph (5) refers to the "Statement of Affairs".

14.     Putting that criticism aside, in my opinion, the three paragraphs in issue are oppressive.  I accept the Estate's submission that the Trustee is not a stranger to the proceedings in the sense that that phrase is usually used in the authorities (see, for example, Pancontinental v Burns at 256, Waind v Hill and National Employers' Mutual General Association Ltd at 382). It is the Trustee's decision which has been reviewed and affirmed in substance. I further accept that the summons does not require the Trustee to form a judgment as to what is relevant to the issues in the proceedings, and is not objectionable on that ground.

15.     However, I find the terms of the three paragraphs are too wide and oppressive.  They impose an onerous burden on the Trustee to collect and produce documents, many of which are, or may be, of doubtful possible relevance to the proceedings (Cosco Holdings Pty Ltd v Federal Commission of Taxation at 442, Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd, Waind at 382). The summons should be set aside.

16.     I appreciate that a summons should be interpreted broadly, and taking into account its likely interpretation by the recipient. I also appreciate that a balancing task must be carried out between the burden placed on the recipient to comply with the summons, and the needs of justice, that is, for the Tribunal to have available to it relevant material. Nevertheless, I am not persuaded that the issuing of a summons cast in such wide terms, and the resulting burden placed on the Trustee, is justified in this case (Southern Pacific Hotel Services at 720).

17. The Trustee has been successful. However, the Tribunal has no power to award costs to the Trustee. Section 67 of the AAT Act provides that a person summoned:

is entitled to be paid fees, and allowances for expenses, fixed by or in accordance with the regulations.    

Regulation 16 of the Administrative Appeals Regulations 1976 is currently expressed only to apply to a “person summoned to appear as a witness”.  In Re Boyle and Commissioner of Taxation Deputy President Forgie held that that expression, as it appeared in the predecessor to s 67 of the AAT Act, did not extend to permit payment of expenses, or costs, to a person summoned to produce documents. I respectfully agree with the learned Deputy President's finding.

DIRECTION

18.     For the reasons set out above, I set aside the summons, issued to the Trustee at the request of the Estate, dated 16 July 2008, and make no order as to costs. 

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Josephine Kelly, Senior Member.

Signed: ………[sgd].………

Steven Mulipola, Associate

Date of directions hearing:  1 September 2008

Date of final submissions:  18 September 2008

Date of decision:  13 October 2008

Solicitors for the Applicant:  Dominic Stamfords Solicitors

Solicitors for the Trustee in bankruptcy:  Henry Davis York Lawyers