Towie and Anor and Inspector-General in Bankruptcy
[2000] AATA 195
•10 March 2000
DECISION AND REASONS FOR DECISION [2000] AATA 195
ADMINISTRATIVE APPEALS TRIBUNAL)
Nº V98/168
GENERAL ADMINISTRATIVE DIVISION)
CHRISTOPHER REES TOWIE
ApplicantOFFICIAL RECEIVER
First respondent
INSPECTOR-GENERAL IN BANKRUPTCY
Second respondent
DECISION
Tribunal: Deputy President G.L. McDonald
Date:10 March 2000
Place:Melbourne
Decision: The decision under review is set aside, and the matter is remitted to the first respondent with a direction that there is no objection to the applicant's discharge from bankruptcy.
(sgd) G.L. McDonald
Deputy President
BANKRUPTCY — application to review various decisions made under the Bankruptcy Act 1966 — application to review decision of trustee to issue contribution assessment and decision of Inspector-General to refuse to reconsider contribution assessment lodged out of time — application to review decision to issue notice under s.139ZL of the Bankruptcy Act beyond the Tribunal's jurisdiction — review of decision of Official Receiver to object to discharge — statutory grounds of objection — circumstances of bankrupt — failure to pay assessed contribution — exercise of discretion
Administrative Appeals Tribunal Act 1975 ss.29(2)(a), 37
Bankruptcy Act 1966 ss.139J, 139L 139W, 139X, 139Z, 139ZA, 139ZD, 139ZE(1)(b),
139ZF, 139ZG, 139ZL, 149A(2)(a)(i), 149B, 149D(1), 149Q(a)
Re Hall (1994) 14 ACSR 488
REASONS FOR DECISION
10 March 2000 Deputy President G.L. McDonald
The applicant is applying for the review of various decisions made under the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"), resulting in an objection pursuant to s.149B of the Bankruptcy Act, dated 9 January 1998, to his discharge from bankruptcy. The Tribunal is empowered to review that latter decision by s.149Q(a) of the Bankruptcy Act.
At the hearing Dr Towie, who is a general medical practitioner, represented himself. The Official Receiver was initially represented by Ms A. Mendes Da Costa and subsequently by Ms F. McLeod, both of counsel. To the limited extent that the hearing involved him, the Inspector-General in Bankruptcy was represented by Mr G. Carroll of the Australian Government Solicitor. Dr Towie, Ms M. Lorenzetto, who had been the practice manager in the Coburg Five Star Medical Clinic; Mr H. Birdogan, who, at the relevant time, was a director of the trustee company Gunesh Pty Ltd ("Gunesh"), which, until its liquidation in 1996, was manager of the Meadow Heights and Mordialloc Five Star Medical Clinics; and Mr W. Ballantyne, who is an employee of the Official Receiver, all gave oral evidence for the applicant. Mr D. Eng, who is an assistant official receiver, a qualified CPA accountant, gave oral evidence for the first respondent. The Tribunal had before it the documents filed for the purposes of s.37 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") (the "T" documents) and other extensive documentation tendered during the course of the hearing.
In his application to this Tribunal of 18 February 1998, Dr Towie has nominated the following four decisions for review:
(a)assessment of income of 1995-1996 made by the Official Receiver [dated 14 March 1997 (T4)];
(b)refusal to reconsider [i.e. refusal by the Inspector-General in Bankruptcy pursuant to s.139ZE(1)(b) of the Bankruptcy Act (T6)];
(c)diversion of moneys from Medicare [as directed by the Official Receiver (T1, pp.23-24) under s. 139ZL of the Bankruptcy Act]; and
(d)the objection to discharge of bankruptcy [by the Official Receiver (T1, p.14)].
The review of decisions (a)-(c) (inclusive) are challenged by the first respondent and the Inspector-General as falling outside the Tribunal's jurisdiction. All parties accept decision (d) as being competent for the Tribunal to review. It is convenient to deal with decisions (a)-(c) (inclusive).
Decisions (a) to (c)
One of the objects of the Bankruptcy Act is to require a bankrupt who derives income during the bankruptcy to pay a contribution to his/her bankrupt estate (s.139J(a)). "Income" is defined as having its ordinary meaning, qualified by the expanded meanings set out in s.139L. Ordinary concepts of income include any payment to a person for the provision of that person's professional services (e.g. medical services). The extended definition in s.139L(a)(iv) includes income received by a beneficiary under a trust, as well as the value of any benefit provided by another person to the bankrupt (s.139L(a)(v)(A)). The Bankruptcy Act provides a methodology for the calculation of the amount of any assessment whereby the actual income threshold amount is determined and the contribution constitutes any sum in excess of that amount (s.139W). In making an assessment of income the trustee may have regard to information provided by the bankrupt and any other information in the trustee's possession (s.139X). Section 139Z provides that where the trustee has reasonable grounds for believing a bankrupt derived, or is likely to derive, income then the trustee may determine the amount of that income.
The Bankruptcy Act provides two courses for a bankrupt to review a decision of the trustee to make an assessment, viz—
(a)s.139ZA(1)(b) allows a bankrupt to request a review by the Inspector-General and requires the bankrupt to show reasons to justify the carrying out of a review. In respect of such a request the Inspector-General must
(i)determine whether (or not) to review the decision (s.139ZA(5)(a)); and
(ii)if the decision is to conduct a review, then the Inspector-General may
confirm the decision (s.139ZD(a)); or
set aside the assessment and make a fresh assessment (s.139ZD(b)); and
(b) s.139ZF(a) provides for review by the AAT.
From the above, it is apparent that an applicant has two bodies to which an application for review of the issuance of an assessment can be made. The Bankruptcy Act does not provide that the dual review rights are exercisable in the alternative. However, it would be administratively cumbersome and potentially embarrassing for two separate bodies to be simultaneously considering the same review. A further difficulty arises in that, if a review is instigated under s.139ZA to the Inspector-General and the bankrupt is unsuccessful in that appeal, a further right of review lies to the AAT, i.e. a person may apply directly to the AAT under s.139ZF(a) or, having exhausted his or her rights under s.139ZA by appealing to the Inspector-General, that person may then appeal to the AAT (s.139ZF(b) and (c)).
Following lodgement of a creditor's petition, a sequestration order was made against Dr Towie on 15 November 1995. The Official Receiver issued a contribution assessment to Dr Towie on 14 March 1997. Dr Towie applied, through his solicitor, on 12 November 1997 for a review of the assessment by the Inspector-General (T5). The Inspector-General, by letter dated 14 November 1997, refused to reconsider the assessment on the basis that the application, while it set out reasons for seeking a review, was not supported by any documentation (T6).
While Dr Towie's application for review to the AAT is dated 18 February 1998, it was not lodged with the Tribunal until 25 February 1998. The decision of the Inspector-General, dated 14 November 1997, is addressed to Dr Towie's then solicitors and is date stamped as having been received by them on 15 November 1997. Despite Dr Towie not apparently receiving the decision until 18 February 1998, it must be considered as being "furnished to the applicant" as expressed (s.29(2)(a) of the AAT Act) on the date on which it reached his solicitors, namely 15 November 1997. From 15 November 1997, he had 28 days in which to lodge an application for review to this Tribunal. For purposes of meeting the 28-day requirement for the lodging of applications for review, the lodgement of the application on 25 February 1998 must be regarded as being lodged out of time. That application was not lodged with an accompanying application to extend time. Consequently, the Tribunal has no jurisdiction to review decision (a) of the application dealing with the assessment of income or decision (b) in respect of the Inspector-General's refusal to reconsider the assessment made by the Official Receiver.
As to decision (c), s.139ZL of the Act, gives power to the Official Receiver by notice to direct a payment to the Official Receiver of an amount otherwise payable to the bankrupt. While there is power for the Federal Court to set aside such a notice, there is no power given in the Act for the Tribunal to review the issuance of such a notice. Accordingly, this matter is also outside the power of the Tribunal to review.
Decision (d)The fourth and final decision (d) of Dr Towie's application for review is indisputably reviewable by the Tribunal. A decision under s.149D of the Bankruptcy Act sets out a number of alternative grounds upon which an objection to a person's release from bankruptcy can be lodged, including—
149D (1) . . .
(f)the bankrupt failed to pay to the trustee an amount that the bankrupt was liable to pay under s.139ZG;
. . .
Section 139ZG provides that a person is liable to pay a contribution at a time to be nominated by the trustee. Section 139ZG(2) provides that the liability of a person to pay a contribution is not affected by any review, including a review to be conducted by the Administrative Appeals Tribunal. If the objection succeeds, Dr Towie's bankruptcy will automatically be extended to a total period of eight years, to 13 January 2004 (s.149A(2)(a)(i)).
Dr Towie is, and has been, since graduating in 1982, and then completing the necessary internship, a general medical practitioner. On 14 March 1997 a notice of contribution assessment was issued in the amount of $36,121, payable at the rate of $3010 per month to commence on 4 April 1997 (T4). No contribution was paid and on 16 June 1997 a notice under s.139ZL of the Bankruptcy Act, requiring payment of the assessed contribution to be made by the Health Insurance Commission ("HIC") at the rate of $4000 per month was issued. The s.139ZL notice effectively redirected payments to the Official Trustee which would otherwise have been made under Dr Towie's provider health care number through HIC reimbursement. The notice was subsequently withdrawn and sums received by the trustee from the HIC were reimbursed when it was found that the funds did not constitute income of Dr Towie, but income of the practice for which Dr Towie was then working. No sum has been received by the Official Trustee by way of contribution from Dr Towie. The Official Receiver complains that Dr Towie has not co-operated in relation to the payment of the contributions and states that objecting to his discharge from bankruptcy is the only means available [to secure payment of the contributions] (T1, p.14).
Dr Towie claims that he has co-operated with the Official Receiver, but that his failure to make any contribution arises because he has not been in receipt of sufficient income to require the payment of a contribution. Dr Towie claims that a number of circumstances have made it impossible for him to make a payment of the contribution, including-
(a)the manner in which a number of the medical practices in which he had a financial interest, through various companies and trusts, have been liquidated or dissolved has resulted in severe personal trauma and disastrous financial consequences for him;
(b)the issuance of the s.139ZL notice in June 1997 effectively made it impossible for him to obtain employment as a medical practitioner because payment of any money he earned on behalf of any medical practice employing him would be automatically redirected to the OfficialTrustee thereby bypassing the employer; and
(c)while he had secured temporary employment for a time as a labourer, his living conditions and personal circumstances were such that he could not earn enough to support himself let alone make any payment.
Dr Towie told the Tribunal that he lived and has been living since his bankruptcy on a property on the outer fringes of the Melbourne metropolitan area; in sub-standard accommodation; without basic facilities (e.g. running water); with illness, including suffering chronic back pain from a disc prolapse, for which physiotherapy was necessary; depression; scabies; mange and dental problems, for which he was unable to afford treatment and which precluded him from employment as a general medical practitioner. He claimed often to be on the verge of starvation. Dr Towie said that members of his family and friends had loaned him money and assisted him to get by.
From the evidence of Mr Eng, the Tribunal is satisfied that, in the absence of any specific financial information provided by Dr Towie as to his income and outgoings, the trustee took the gross amount which the HIC advised was paid under Dr Towie's provider number in the assessment period and estimated expenses which the trustee determined would be likely to be incurred by a general medical practitioner and applied the resultant figure to Dr Towie in order to reach the assessment (T5, p.73). Aside from expressing concerns as to how such an average figure was, or could be, determined, Dr Towie claimed that the methodology was, in any event, inappropriate to his circumstances. He claimed that his circumstances were not reflective of those of a self-employed general medical practitioner. In particular, he claimed his HIC provider number was used by a number of doctors, including locums, associated with his practices and that the nature and extent of his financial commitments to the various practices with which he was associated were more extensive than that reflected in the average outgoings of a general medical practitioner.
Dr Towie said that he had a background in his early years of medical practice in working in community-based medicine, both in Australia (e.g. for remote aboriginal communities) and abroad (e.g. in the Philippines). He said that he determined to establish a number of medical practices in and around Melbourne with the ultimate aim of providing finances which could be utilised for fulfilling charitable purposes. He did this by establishing new practices where none previously existed and/or entering into arrangements with existing practices. In all, he said, there were 35 such clinics in which he had been involved over a 25-year period. The clinics were styled by the name of the location followed by "five star medical clinic". It appears at one stage there were 20 such clinics operating simultaneously. Dr Towie said that each clinic was owned by a trust or trusts (set up for the benefit of Dr Towie and/or his family and other medical practitioners involved in the various clinics) and each was operated by a trustee company. In the period leading up to his bankruptcy Gunesh was trustee for (at least) Meadow Heights and Mordialloc Five Star Clinics and Woodbury Craft Pty Ltd ("Woodbury Craft") as trustee for at least some units in the Towie/Baltra unit trust which owned units in the Werribee, Cranbrook, Footscray and Coburg Five Star Clinics.
Dr Towie said accounts for nearly all patients at the clinics were bulk billed to the HIC. While there was a small proportion of workers' compensation and private patients, these contributed no more than 5 per cent of the overall income earned by the practices. Dr Towie claimed that:
(a)he was regarded as the medical director of the various medical centres with which he was involved and that the fulfilment of that position, while it provided back up information and support to the doctors in the various practices, did not generate any income and took time in which Dr Towie could otherwise earn income as a general medical practitioner;
(b)the arrangements with doctors who worked at the Five Star Clinics varied. In some cases a doctor's income was guaranteed by the practice, regardless of whether or not the bills charged to the HIC by the particular general medical practitioner reached or exceeded the sum set in the guarantee. In such cases the shortfall was made up from the principals in the practice, effectively including Dr Towie (i.e. through his company trust structures). In one case an employed doctor received a fixed percentage of the HIC payment, the balance of which was applied to paying back wages owing to that doctor (trans, 12.3.99, p.45)
(c)in some cases doctors used their own provider number to bill directly to HIC, whereas in other cases employed doctors used Dr Towie's provider number. In other cases there was group linking, i.e. the doctors in the practice and the practice requesting the HIC to pay all bulk billing to the practice entity;
(d)Dr Towie also said that in some of the practices additional services were offered (e.g. audio testing and this was verified by Mr Birdogan's evidence, including payments for a chiropractor, weight loss therapist (trans,22.4.99., pp.22, 23, 30, 31) which were not profitable and some of which could not be reimbursed via the HIC and, accordingly, operated at a cost to the practice; and
(e)additionally, there were other financial responsibilities relating to the maintenance of the practices which fell more onerously on Dr Towie than on any other of the general medical practitioners involved, e.g. he personally guaranteed the payment of rent for the premises of some of the practices.
At the time of his bankruptcy Dr Towie said, and the Tribunal accepts, he was practising only at the Meadow Heights and at the Cheltenham Five Star Clinics. The Tribunal also accepts his claim that he was not earning income from any other of the clinics with which he was previously involved with the exception of Footscray where he was receiving a return of $350 per week. The Cheltenham practice, according to Dr Towie's evidence to the Tribunal, ran at a loss until eventually he abandoned his participation in it. In relation to that practice there was an inability to pay an increased rent demanded by the landlord after which Dr Towie said that he was locked out of the clinic. It was Dr Towie's evidence that the income of the Cheltenham clinic, received largely from the HIC, was, in the main, paid to doctors employed at the clinic using Dr Towie's HIC provider number.
Dr Towie concedes that he received some income during the assessment period. He has claimed it was difficult for him to accurately determine the extent of that income, in particular since his bankruptcy he claimed not to have had access to the documentation which would allow him to more accurately calculate his income. Different figures emerge from different documents prepared by Dr Towie, e.g. document 7 of exhibit W is a summary, prepared by Dr Towie, of cheques drawn on the Meadow Heights practice but applied for his personal benefit (which for the purposes of the Bankruptcy Act constitutes "income"), totalling $17,407.41. In his appeal to the Inspector-General he estimated a gross income of $298,766.35 with expenses of $220,000, his income to be ". . . only approximately $15,000 to $20,000 a year . . ." (T5). However, in his oral evidence to the Tribunal, he said that, while the gross income set out in T5 related to both the Cheltenham and Meadow Heights practices, he omitted to deduct expenses relating to the Cheltenham Clinic (trans, 12.3.99, p.39). In the draft taxation return for 1995/1996 year, which Dr Towie prepared, he estimated his income to be $15,000 (exh W). In an affidavit prepared to support an application in the Bankruptcy Division of the Federal Court of Australia, and affirmed on 6 November 1995, he estimated a weekly income which would translate to in excess of $150,000 per year, but in relation to which he claimed in his oral evidence to the Tribunal that the level of income mentioned in the affidavit did not continue for the whole of the relevant assessment year, and further, he did not take into account the costs of operating the medical clinics (trans, 12.3.99, p.92). The affidavit also mentions (in clause 15) payments of amounts totalling a $100,000 as being paid by the Towie/Baltra unit trust to the Australian Taxation Office ("ATO") in relation to outstanding taxation owing for the tax year 1991/1992 (or earlier). However, in his oral evidence to the Tribunal Dr Towie said that the $100,000 owing was constituted by outstanding group tax, owed by the Towie/Baltra unit trust and maintained that approximately $35,000 remained payable by him personally to the ATO payments of which sum remained outstanding. The distinction between Dr Towie's personal debt to the ATO and any amount owing by the Towie/Baltra unit trust, in the affidavit affirmed on 6 November 1995 at paragraphs 8(b) and 13, presents a confusing picture as to what is owing by Dr Towie personally for outstanding income taxation liability and the Towie/Baltra unit trust for outstanding group tax. In his oral evidence to the Tribunal Dr Towie said that he had, at some stage, tried to negotiate with the ATO concerning the allocation of payments for his personal taxation debts and those relating to the Towie/Baltra unit trust. Paragraph 3 of the affidavit Dr Towie affirms $600 per week is income tax expense, but acknowledges that he was not paying that sum to the ATO. In his statement of affairs (T3, p.49) he describes the ATO amongst his unsecured creditors as being owed $35,000 in relation to provisional tax and $100,000 in relation to penalties.
Ultimately, in his oral evidence to the Tribunal Dr Towie agreed that a sum of $24,000 would more accurately reflect his personal income before taxation for the assessment period. This is below the threshold which would give rise to him having to pay any contribution.
At the time of the contribution assessment and subsequently Dr Towie claimed:
(a)he had not filed taxation returns for any of the trusts which control the clinics since 1992. He said that, at least for the earlier period, taxation returns had been prepared by Dr Baltra (who was not a medical practitioner), but that Dr Baltra, who acted as manager for some at least of the clinics, had left Australia to live in Chile. Dr Towie said that Dr Baltra had withheld all the relevant documentation from him; had physically assaulted him, breaking his ribs, resulting in police action following which there was a breakdown of communication between him and Dr Baltra. Dr Baltra left Australia and the financial records are unable to be recovered (trans, 11.3.99, p.12). What must be regarded as draft tax returns for 1990-1998 (inclusive) were provided by Dr Towie as part of exhibit W;
(b)Meadow Heights clinic was owned in equal shares by trusts associated with Dr Towie and another doctor, Dr Ahmet, and was operated by a trustee company (Gunesh). The practice was managed on behalf of Gunesh initially by Ms Richards and subsequently, at least nominally, by Mr Birdogan. Dr Towie claimed that he guaranteed the payment of the rent for the premises in which the Meadow Heights practice was located, but that he was evicted from the premises in May 1997. At that point Dr Ahmet set up a practice nearby using all of the equipment, including Dr Towie's clothes left at the original premises, for which Dr Towie received no consideration. Dr Towie also stated, despite an initial misunderstanding, the Official Receiver had withheld permission for him to sue Dr Ahmet to recover approximately $26,000 claimed by Dr Towie to be owing to him (trans, 11.3.99, p.11);
(c)while, and this was confirmed by Mr Birdogan's evidence (trans, 22.4.99, pp.34, 35), daily books were kept showing doctor/patient contacts for the Meadow Heights practice, these books were, at all relevant times, not accessible by Dr Towie as they were held by accountants involved in the winding up and/or management of Dr Towie's associated companies and trusts;
(d)Dr Towie said that some of the practices were grouped linked which involved employed practitioners using his HIC authorisation and that, accordingly, money shown by HIC as being earned by Dr Towie was not necessarily earned by him personally. Similarly, locum practitioners, who were engaged by the practices in which he was involved, also used his HIC authority, again causing a distortion of the HIC amounts recorded as being earned by him. In any event, Dr Towie said that, despite working long hours, he did not receive any direct monetary payment as the result of his efforts in practice at Meadow Heights and/or Cheltenham, all of which was committed to meeting expenditure connected with the practices;
(e)while, through a trust he had an interest in a property at 229 Heath Road at Werribee, he claimed the costs associated with maintaining a commercial bill to the ANZ Bank for finance to purchase the property were greater than the rent received and that there was, in effect, no equity in the property;
(f)in the period leading up to his bankruptcy he had a large number of legal actions – both civil and criminal – in which he was involved and which had resulted in substantial debts payable to a legal firm ($300,000 in the year before his bankruptcy) (trans, 11.3.99, p.5); and
(g)he owed $60,000 lent to him prior to his bankruptcy by his father.
While Dr Towie claimed money recouped from his consulting at the Meadow Heights clinic was retained by the practice, it was Mr Birdogan's evidence that some, at least, of the money earned by Dr Towie was directly paid to Dr Towie's family trust. Mr Birdogan, however, also said that that trust made payments to, or on behalf of, the clinic. It was also Mr Birdogan's evidence that, at some period during the 1995/1996 year, through group link arrangements, money earned at Meadow Heights was paid to support the Mordialloc clinic. This occurred during a period in which the Mordialloc practice manager was managing the Meadow Heights accounts.
Attachment 10 to exhibit W includes a letter from the HIC to Dr Towie of 28 April 1998. It shows Medicare cheques and services provided by Dr Towie as follows:
1 July 1995 to 28 August 1995 were paid to Five Star Meadow Heights,
1 December 1995 to 30 January 1996 were paid to Gunesh Pty Ltd, and
27 February to 20 November 1996 were paid to Gunesh Pty Ltd.
The letter makes no mention of any payments in the period 29 August 1995 to 30 November 1995, or from 30 January 1996 to 26 February 1996. The letter continues that benefits were payable to Oronico Pty Ltd ("Oronico") (Oronico being the trustee of the Chris Towie family trust) from 21 November 1996 to 5 December 1996. The Tribunal appreciates the latter payment is inside the period of assessment, which ended on 9 June 1996. For the period in which the letter makes no mention, the Tribunal is left uncertain as to whether or not any payments were made and, if so, whether they were paid to Dr Towie or to group linked practices or to an entity such as a trust associated with Dr Towie.
The determination to object to the discharge of a bankrupt resulting in the extension of his/her period of bankruptcy involves the exercise of a discretion, for which a reason, or reasons, ought be stated (Re Hall (1994) 14 ACSR 488 per Branson J at 493). The totality of Dr Towie's circumstances should be considered in undertaking a merits review process in order to determine whether the preferred decision is to uphold the objection to his discharge. In carrying out that function this Tribunal looks to the material and evidence produced or called before it. That material and evidence may, and in this case does, contain more detailed information from that which was before the original decision-maker. It is not the function of the Tribunal to determine whether it would reach the same decision as the original decision-maker on the material which was before him or her. Nor is it, as the first respondent pointed out in its submission to the Tribunal, the Tribunal's function to assess the correctness or reasonableness of the steps which led the original decision-maker to his or her decision.
On the evidence before it the Tribunal is satisfied that Dr Towie has failed to pay the assessed contribution required of him. The issue then is whether that failure should result in his period of bankruptcy being extended. The determination of this issue is to be made bearing in mind that the purpose to be achieved in the application of the bankruptcy laws is not to punish the bankrupt, but rather to allow an ordered determination as to a bankrupt's property and income so as to ascertain whether and if so what contribution ought be made in favour of the bankrupt's creditors before the bankrupt's discharge from bankruptcy. In the instant case, the contribution has been assessed but, as stated, Dr Towie has failed to pay it. The function of the Tribunal is to decide the reasons for that failure and determine whether they are such that the objection to his discharge from bankruptcy should, or should not, be affirmed.
While there is more evidence and material before the Tribunal than was before the original decision-maker, not all of it has helped to clarify the facts. The examples cited earlier in these Reasons disclose a confusing picture from Dr Towie's evidence. His personal income and liabilities tend to be merged with those of the various entities through which the Five Star medical practices operated. The evidence discloses further uncertainties. For example, Dr Towie asserted that locums engaged in the practices during the contribution assessment year sometimes used his provider number for bills submitted to the HIC. Evidence led by the first respondent demonstrates that this was not an approach endorsed by the relevant legislation (exh P). Ms Lorenzetto, who managed the Five Star practice at Coburg for a period of five years, stated that their group link arrangements had not been made, which was often the case with locum doctors with a practice for a short period of time. In such cases, the provider number of one of the doctors constantly at the practice was used to cover the locum. It is not for this Tribunal in this case to determine the legalities of the HIC claims procedures adopted in practices associated with Dr Towie. The Tribunal accepts that whether it be irregular or not the practice adopted in the Five Star Clinics was to use Dr Towie's provider number for some of the doctors engaged by the practices and that, accordingly, the Tribunal is satisfied that any assessment of the income earned under Dr Towie's provider number may not, in fact, reflect his personal earnings. It is fair to conclude that the confusion evidenced by the manner in which Dr Towie operated his medical practices and his personal circumstances display a high degree of disorganisation. That, however, does not necessarily lead to a conclusion that he is dishonest or has been uncooperative.
The Tribunal is satisfied that Dr Towie's personal and financial circumstances changed at or shortly after the contribution assessment was determined. The Tribunal accepts from the above that his circumstances were such that:
he was precluded from continuing to work in his practices at Cheltenham and Meadow Heights,
in any event, those practices (including income received from Footscray where Dr Towie was not apparently making a contribution by seeing patients) were not earning sufficient money for him to pay the outgoings let alone make any contribution to his bankrupt estate,
apart from the income from Footscray, he had no other income despite his interests in other trusts, e.g. the Towie/Baltra Trust in relation to the Werribee property, were not returning any net income to him which in turn he could use to pay any contribution and he was not in receipt of income – directly or indirectly from any of the other five star clinics;
the issuance of the garnishee order against his HIC income and its subsistence for a period of some months during the contribution period precluded him from obtaining effective employment in the area of general practice for which his background and experience qualified him,
it is more probable than not that there was a deterioration in his personal health circumstances owing to the reduced physical circumstances in which he was living which would have made it impossible for him to obtain employment as a general medical practitioner in any event; and
there is no evidence before the Tribunal which would or could lead it to be satisfied that Dr Towie had any other income upon which he could draw in order to pay the contribution assessed.
Accordingly, Dr Towie was unable because of the lack of income and an inability to earn money to pay the contribution required of him.
Much of the evidence from Mr Ballantyne and Mr Eng was aimed at highlighting the difficulties that the trustee was experiencing in obtaining contemporaneous records from Dr Towie in order to highlight the difficulty the trustee had in obtaining factual evidence upon which to base the assessment. On the other hand, Dr Towie sought to show from their evidence the difficulties that he experienced in providing information and in meeting the demands made by the Official Receiver. The Tribunal accepts that Dr Towie could not secure access to the relevant practice records at Cheltenham because of Dr Baltra withholding the records and, for Meadow Heights because of the non-cooperation of either or both of Dr Ahmet or Mr Birdogan. Such documents, as he had, Dr Towie obtained through the use of freedom of information procedures brought against the Official Receiver/Trustee. Those documents were obviously documents already in the control of the Official Receiver/Trustee.
Having regard to Dr Towie's deteriorating health situation, the issuance of the garnishee order to the HIC and the resultant inability for him to earn income as a general medical practitioner, and that in the Tribunal's opinion he has cooperated as far as he has been able in the winding up of his estate, there is no reason as to why his discharge from bankruptcy ought be objected to.
For the reasons above expressed, the decision under review is set aside, and the matter is remitted to the first respondent with a direction that there is no objection to Dr Towie's discharge from bankruptcy.
I certify that the twenty-seven [27] preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President G.L. McDonald
(sgd) Judith Birch
AssociateDates of Hearing: 22.02.99, 11-12.03.99, 15.03.99, 21-22.04.99
20-21.05.99
Date of Decision: 10.03.2000
Solicitor for the Applicant: IN PERSON
Counsel for the First Respondent: Ms F. McLeod
Solicitor for the First Respondent: Messrs Dunhill Madden ButlerSolicitor for the Second Respondent: Mr G. Carroll, Australian Government Solicitor
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