Trkulja and Anor and Inspector General in Bankruptcy
[2005] AATA 709
•26 July 2005
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ADMINISTRATIVE APPEALS TRIBUNAL Nº V2003/1132
Nº V2004/37
GENERAL ADMINISTRATIVE DIVISION Nº V2004/627
Re: MILORAD TRKULJA
Applicant
And: INSPECTOR GENERAL IN
BANKRUPTCY
Respondent
Re: ROBERT MORTON
Applicant
And: INSPECTOR GENERAL IN
BANKRUPTCY
Respondent
DECISION
Tribunal: Mr B.H. Pascoe, Senior Member
Date: 26 July 2005
Place: Melbourne
Decision:The Tribunal varies the decision in application V2003/1132 to the extent of setting aside that part of the decision which affirmed the ground of objection to discharge pursuant to s 149D(1)(n) of the Bankruptcy Act 1966 (“the Act”) and, instead, cancels that ground of objection. In all other respects the decision is affirmed.
The Tribunal varies the decision in application V2004/627 to the extent of setting aside that part of the decision which affirmed the grounds of objection to discharge pursuant to s 149D(1)(b) and s149D(1)(f) of the Act and in its stead cancels those grounds of objection. In all other respects the decision is affirmed.
The Tribunal affirms the decision in application V2004/37.
(sgd) B.H. Pascoe
Senior Member
BANKRUPTCY – objections to discharge – contravention of s 206A of the Corporations Act 2001 – misleading conduct in relation to an amount exceeding $3000 – failure to comply with request for information about property or income – failure to pay income contribution – failure to disclose beneficial interest in property – calculation of income contribution assessment
Bankruptcy Act 1966
REASONS FOR DECISION
26 July 2005 Mr B.H. Pascoe, Senior Member
These are three applications to review decisions of the respondent in relation to the bankruptcy of the principal applicant, Mr M. Trkulja. The first two decisions dated 16 September 2003 and 24 October 2003 confirmed the decision of the trustee in bankruptcy, Mr R. Morton, to file a notice of objection to discharge from bankruptcy. The third decision of 12 December 2003 was to issue a fresh income contribution assessment after review of the trustee prior assessment. Both the trustee and Mr Trkulja sought review of the decision.
At the hearing Mr Trkulja and his trustee, Mr Morton, were unrepresented. Mr G. Carroll, a solicitor with the Australian Government Solicitor, represented the respondent. Evidence was given by Mr Trkulja.
Mr Trkulja was made bankrupt on 4 September 2000 pursuant to a debtor's petition and Mr Morton was appointed trustee. By notice of objection to discharge dated 29 January 2003, the trustee objected to the discharge of Mr Trkulja from bankruptcy pursuant to s 149D(1)(d), s 149D(1)(n) and s 149D(1)(b) of the Bankruptcy Act 1966 (“the Act”). By further notice of objection to discharge dated 3 September 2003, the trustee objected to discharge from bankruptcy pursuant to s 149D(1)(c), s 149D(1)(b) and s 149D(1)(f) of the Act. The relevant provisions of the Act are:
149B(1) 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.
(2) The trustee of a bankrupt’s estate 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.
…
149D(1) The grounds of objection that may be set out in a notice of objection are as follows:
...
(b)after the date of the bankruptcy, the bankrupt contravened section 206A of the Corporations Act 2001 (disqualification from managing corporations);
(c)after the date of the bankruptcy the bankrupt engaged in misleading conduct in relation to a person in respect of an amount that, or amounts the total of which, exceeded $3,000;
(d)the bankrupt, when requested in writing by the trustee to provide written information about the bankrupt’s property, income or expected income, failed to comply with the request;
…
(f)the bankrupt failed to pay to the trustee an amount that the bankrupt was liable to pay under section 139ZG;
…
(n)the bankrupt failed, whether intentionally or not, to disclose to the trustee the bankrupt’s beneficial interest in any property.
...
Mr Trkulja requested a review of these decisions of the trustee pursuant to s 149K of the Act. The respondent’s confirmation of both decisions is the subject of the applications to the Tribunal.
It is important to summarise the grounds of the objection in the order in which they appear in s 149D of the Act. The objection of 29 January 2003 in relation to s 149D(1)(b) alleged that Mr Trkulja had continued to manage the affairs of the corporation, Fox Video Pty Ltd, whilst an undischarged bankrupt in contravention of the Corporation Act 2001 ("the Corporations Act)". The objection of 3 September alleged that he similarly contravened the Corporations Act in relation to two other companies, SAT Yugoslav Airlines Pty Ltd (“SAT”) and Vesti Pty Ltd (“Vesti”).
The objection in relation to s 149D(1)(c) of the Act alleged that Mr Trkulja obtained credit as a consequence of the use of a credit card in an amount, or amounts, the total of which exceeded $3000 whilst bankrupt. Section 148 of the Act provides that
…a bankrupt is taken to have engaged in misleading conduct in relation to a person in respect of a particular amount (in this section called the relevant amount) if:
(a)the bankrupt, either alone or jointly with any other person, obtained credit to the extent of the relevant amount from the first-mentioned person without informing that person that he or she was an undischarged bankrupt;
…
The objection in relation to s 149D(1)(d) of the Act was based on a long history of Mr Trkulja's failure to disclose information in relation to numerous banking and credit card accounts, income, cause of bankruptcy, property transactions, residential address, etc. It was the conclusion of the respondent that the administration of the bankrupt's estate had been conducted by the trustee without any voluntary assistance, or the provision of further information, unless demanded under statute by the trustee.
The objection in relation to s 149(D)(1)(f) of the Act resulted from an income contribution assessment served on Mr Trkulja by the trustee on 29 January 2003. The assessment was for the period 4 September 2000 to 3 September 2001 and required payment of $28,906.33 “forthwith”. No payments were made pursuant to that trustee assessment. The assessment was received by the respondent on the request of Mr Trkulja dated 15 October 2003. The respondent, by letter of 12 December 2003, set aside the decision of the trustee and made a fresh assessment of a contribution liability of $8931.
The objection pursuant to s149D(1)(n) of the Act alleged that Mr Trkulja had failed to disclose his beneficial interest in the business of Fox Video Pty Ltd and a property at Jeffcott Street, West Melbourne.
Where the respondent is requested to review a decision of the trustee to file a notice of objection under s 149K of the Act, s 149N applies to that review and any subsequent review by the Tribunal. Section 149N provides:
149N(1) On a 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, or on grounds that included that ground or those grounds, was cancelled;
the Inspector-General must cancel the objection.
(1A) 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.
For this purpose, special ground means a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma).
(1B) In applying subsection (1A), no notice is to be taken of any conduct of the bankrupt after the time when the ground concerned first commenced to exist.
(2) The cancellation does not take effect until:
(a)the end of the period within which an application may be made to the Administrative Appeals Tribunal for the review of the decision of the Inspector-General; or
(b)if such an application is made—the decision of the Tribunal is given.
(3) If the Inspector-General is not satisfied as mentioned in subsection (1), the Inspector-General must confirm the decision.
In relation to the allegation that Mr Trkulja was involved in the management of Fox Video Pty Ltd, his evidence was that this company was owned and managed by his daughter. Mr Trkulja said that the company ceased trading and was deregistered in February 2002. Subsequently he operated the business under the registered business name “Fox Video”. Mr Trkulja ultimately conceded that the company, prior to it ceasing business, had been managed by him. The objection by the trustee was based on financial documents seized under search warrants which disclosed multiple transactions on a number of credit card accounts controlled by Mr Trkulja and which related to the business of Fox Video Pty Ltd. Further evidence relied upon were the examination of Mr Trkulja and his daughter under s 81 of the Act where Mr Trkulja acknowledged that he made all the decisions relating to the business of Fox Video Pty Ltd and his daughter accepted that it was her father’s business; she answered to him; and she had no idea of her responsibilities as a director.
While the company ceased trading in February 2002, I am satisfied that, prior to that date, Mr Trkulja was the person responsible for the management of Fox Video Pty Ltd and the de facto managing director in contravention of s 206A of the Corporations Act. There is sufficient evidence to support the existence of the ground of objection pursuant to s 149D(1)(b) of the Act. In relation to the other two companies, SAT and Vesti, while Mr Trkulja was a director of each of the companies for a period during his bankruptcy, there is no evidence of any trading or activity by the companies during such period. The respondent conceded that the mere incorporation and nomination as a director of a company which is not trading is not sufficient to enliven s 149D(1)(b) of the Act. In my opinion this is an appropriate concession and the objection on that ground in relation to SAG and Vesti should be cancelled.
In relation to the ground of objection under s 149D(1)(c) of the Act the evidence showed that Mr Trkulja applied for an ANZ Bank Visa card on 4 June 2002 and an increase in the credit limit from $15,000 to $25,000 on 26 July 2002. In the initial application, he stated that he was employed as a marketing manager on a salary of $48,500 per annum and had encumbered assets of $470,000. A representative of the ANZ Bank advised the trustee and the respondent that Mr Trkulja had not advised the bank of his bankruptcy. Records of the credit card transactions disclose that, on several occasions between August 2002 and June 2003, amounts owing on the credit card exceeded $3000. The first transaction on 7 August 2002 was a cash advance of $5000, with a payment to reduce the outstanding amount to $384.18 on 12 August 2002. The highest amount owing was $15,147.66 on 4 December 2002 with several cash payments converting the balance to credit by 13 December 2002.
Mr Trkulja offered no evidence to dispute the existence of this ground of objection other than to say that the new credit card was obtained to replace one which had been cancelled as a result of fraudulent use in the United States of America. He maintained that the financial information provided in the application for the card was a deliberate lie to ensure success in his application. He stated that the application “was not a legal document” and that it was “up to the Bank to follow up”. There is clear evidence that Mr Trkulja engaged in misleading conduct in its generally understood sense but, in particular, he engaged in misleading conduct under the specific wording of s 148. Consequently, I am satisfied that there is sufficient evidence to support the grounds of objection under s 149D(1)(c) of the Act.
The background facts leading to the ground of objection pursuant to s 149D(1)(d) of the Act were conveniently summarised in the respondent's statement of facts and contentions. The supporting documentation was provided to the Tribunal. The relevant extract of the respondent's statement is:
…
10.On 22 February, 2001 the Trustee hand delivered a letter to the Bankrupt(…). The letter requested the Bankrupt to provide written information about a number of matters which are set out as follows. The Bankrupt was required to identify in writing any change of address. Under the heading "Real Property" the Bankrupt was to provide a written account of the distribution of the sale proceeds of any property sold in the last five years. Further, any transfer of property to a third party in the last 5 years was to be identified, together with details of the transfer and what was paid for the transfer. The Trustee required the Bankrupt to provide all banking records for the last two years. The Bankrupt was also requested to identify if he had carried on a business, and, if so, provide full details of the business and whether there are any business assets. No response was received to that letter.
11.A letter dated 8 March 2001 ("the second letter") (…) was sent to the Bankrupt requiring a written response to the second letter by 16 March 2001. The second letter set out again the information requested on 22 February 2001, and requested written answers to additional information, both of which are summarised as follows:
a)Banking records for the last two years;
b)Details of any businesses together with any assets of those businesses carried on by the Bankrupt;
c)Information requested pursuant to the "Bankruptcy Information Sheet";
d)Information on passports; and
e)Real property transactions including details of any transfer in the last five years.
12.The further information sought by the second letter was:
a)Completion of pages 15-21 of the Bankrupt's Statement of Affairs;
b)An explanation of causes of his bankruptcy;
c)The date when the Bankrupt first had difficulty meeting his debts;
d)Full details of all legal proceedings and all disputes involving the Bankrupt including four identified in the Statement of Affairs;
e)The Bankrupt was required to complete a Statement of Income and other information for the period 4 September 2000 to 2 September 2001;
f)Information was requested in relation to Milka Trkulja who had a share in Fox Video Pty. Ltd. (Fox Video) and was identified as Director and Secretary. Details were requested as to who that person was and whether they were related to the Bankrupt. Additionally, the Bankrupt was requested to identify if his employer was a relative and whether he or members of his family had a financial interest in his employer's business; and
g)The Bankrupt was requested to provide details of his residential address.
13.The Bankrupt responded in writing to the written request by the Trustee in two letters, both dated 15 March 2001. The Bankrupt provided the following written information under a number of headings {…} which is set out below with reference to the corresponding sub-paragraphs in pars 11 and 12 above:
11a)Bank records - The Bankrupt stated he supplied his bank records to ITSA. The only statement he claimed to have was from Westpac, a copy of which he provided together with notice that the Trustee could get all information from that bank.
11b)Details of any businesses - under the heading Bankruptcy Information Sheet the Bankrupt provided in answer to this information a notation "Also enclosed is part C business details as requested". This document comprised pages 15-18 of the Bankrupt's Statement of Affairs. In it he ticked the box 'No' to each of three questions asking if he had been in business in the last 5 years as a sole trader, in partnership, as director or manager of a company, as a unit holder in or beneficiary in a trust, or transferred any assets to a trust.
11c)Bankruptcy information Sheet - under this heading a Statement of Income and other information for the period 4 September 2000 to 3 September 2001 was provided in addition to that detailed under the preceding sub-paragraph.
11d)Passports - the Bankrupt responded that he could not locate his passport and that he would not be leaving the country in any event but would provide it to the Trustee if he found it.
11e)Real Property - The Bankrupt appears to answer simply there were no property transactions and that a Deed of Assignment (to Mira Todoran) had been forwarded to ITSA, the office of his previous trustee.
12a)Completion of Statement of Affairs - Completed document provided.
12b)Causes of bankruptcy No written response.
12c)Date the Bankrupt first had difficulty meeting debts - No written response.
12d)Details of legal proceedings - The second letter from the Bankrupt dated 15 March 2001 (…) identified a heading "Writ 2000/05455". The Bankrupt identified this proceeding was on foot and provided a copy of the Writ. There was no written response to the other identified legal proceedings.
12e)Statement of lncome - See 11c) above.
12f)Information on Fox Video - The Bankrupt's response was "My mother Milka Trkulja, doesn't hold any share in Fox Video Pty. Ltd." There was no written response to the ancillary requests about the Bankrupt's employer.
12g)Residential Address - No written response. The Bankrupt advised the Trustee that he could be contacted as follows: "All communication to me, any letters should be sent to: PO Box 359, Kew, 3101." A mobile phone number was also provided.
*Mr Trkulja maintained that his reason for the failure to comply was that his computer and records had been seized by the trustee and he no longer possessed the required information. However, the evidence showed that the trustee believed that the information provided by Mr Trkulja was either incorrect or inadequate. On 12 June 2001 the trustee executed a search warrant issued by the Federal Court of Australia under s 130(2) of the Act. A further search warrant was executed on 15 August 2003. Documents so obtained included banking records and credit card records not previously disclosed by Mr Trkulja and details of business undertakings, particularly in relation to Fox Video. Both search warrants were executed well after Mr Trkulja had been requested in writing for information and had failed to do so. It is clear that his response of 15 March 2001 failed to comply with the requests and was prepared when he had full access to his records. Again, I am satisfied that there is sufficient evidence to support the grounds of objection under s 149D(1)(d) of the Act and that Mr Trkulja has failed to establish that he had a reasonable excuse for failing to comply with the request to provide information.
It is appropriate to note at this point that Mr Trkulja is not a stranger to the effects and responsibilities of bankruptcy. He was previously bankrupt in 1995 and had entered into an arrangement under Part X of the Act in 1980. It was made very clear during the hearing that there is very strong animosity between Mr Trkulja and Mr Morton. Mr Trkulja has an application before the Federal Court for the replacement of Mr Morton as trustee. It is not relevant to these applications to consider the reasons for dispute other than to recognise that there has been a history of failure of cooperation in the proper administration of the estate.
The next ground of objection was under s 149D(1)(f) of the Act where it was contended that Mr Trkulja failed to pay an amount to the trustee that he was liable to pay under s 139ZG of the Act. By notice of 29 January 2003, the trustee served personally an income contribution assessment for the period 4 September 2000 to 3 September 2001. Under that notice, payment of $28,906.33 was required “forthwith”. No payment was made and, some 10 months later, on 16 October 2003, a request was made for review of the assessment by the respondent under s 139ZA. It is clear that such a request for review does not entitle the bankrupt to further time in which to pay the contribution. However, the respondent conceded that the notice of contribution was flawed in that, while s 139ZG(1) requires payment at such time as the trustee determines, s 139ZI(3) provides:
139ZI(3 )The time at which a payment is to be made by a person as a result of a determination made under section 139ZG must not be earlier than 14 days after notice of determination is given to the person under subsection (1) of this section.
It is clear that the notice of contribution specified a date prior to 14 days from the date of the notice and was deficient. Consequently, it can be properly argued that Mr Trkulja was not liable to pay an amount under s 139ZG of the Act and no failure to pay arose. Consequently, the ground of objection under s 149D(1)(f) of the Act is not made out and the objection on that ground should be cancelled. While it would appear that the trustee can cure the defect by using a new determination with the appropriate time in which to pay, no such further determination is before me. The nature of assessment on review by the respondent was dated 12 December 2003, and included the statement:
Accordingly the bankrupt is required to make contributions of $8,931 to his bankrupt estate. He should contact the trustee direct to make arrangements for payment of the amount.
No payment was made in relation to this determination. However, I am unable to accept that this notice satisfied the requirements of s 139ZGof the Act where, again, the time when payment was required was not satisfied.
The final ground of objection was pursuant to s 149D(1)(n) of the Act. Whilst the large volume of documentation provided by the trustee and the respondent and the minimal information provided by Mr Trkulja lead to the assumption that Mr Trkulja has beneficial interests in property which has not been disclosed, there are no clear facts on which a finding can be made. The two specific items of property which were alleged to be owned, but not disclosed, were the interest in Fox Video and real estate at Jeffcott Street, West Melbourne. It seems clear from the evidence that the business of Fox Video, at the time that Mr Trkulja completed his statement of affairs and responded to requests for further income, was carried on by a company Fox Video Pty Ltd. The sole shareholder of that company was the mother of Mr Trkulja. While I have found that he was the controller and the governing mind of that company, this does not mean that company’s money or other property became his property. There may be some rights of action against him to the extent that he may have acted without due regard to shareholders and creditors of the company, but it cannot be seen that the assets of the company were his. The trustee took the view that Mr Trkulja was the beneficial owner of the shares in Fox Video Pty Ltd with his mother as the nominee. At best, this is an assumption and I have no clear evidence to support the trustee’s view.
The matter of the Jeffcott Street property has been resolved after the date of the hearing. The trustee had commenced proceedings to recover the property in the Federal Magistrates Court. On 26 May 2003, Phipps FM handed down a judgement dismissing the trustee’s claim. It was found that the factual foundation for the claim did not exist and the property was correctly the property of the mother and sister of Mr Trkulja. Reference to Fox Video Pty Ltd, which appeared to be the source of the mortgage on Jeffcott Street, was made in the decision of Phipps FM and a reading of that decision indicates that, if it had been before the Court, the ownership of the shares in that company would have been confirmed as that of Mr Trkulja’s mother.
It is appropriate to note, as an indication of Mr Trkulja’s attitude to the trustees objections to discharge, that, immediately after the Court decision was handed down, he provided a copy to the Tribunal under a covering letter that indicated his assumption that the Jeffcott Street property was the sole and primary basis for the objection to discharge and, consequently, his application to the Tribunal should succeed. Again, he has conveniently ignored the other grounds of objection.
As a consequence of the foregoing, I am satisfied that there is not sufficient evidence to support the grounds of objection under s 149D(1)(n) of the Act.
The remaining issue is the calculation of an income contribution assessment in relation to the period 4 September 2000 to 3 September 2001. It is noted that no assessments have been made in relation to any subsequent period. It would appear that the trustee is awaiting the result of the dispute in relation to that original period now before the Tribunal. The trustee’s assessment was based on an assessed gross income of $146,805.40. After allowance for income tax and the actual income threshold, the contribution assessed was $28,906.33. This is compared with gross income of $27,300 shown by Mr Trkulja in his statement of income prepared on 13 March 2001. The difference was $119,505.40, being the total of payments from seven National Bank credit cards operated by Mr Trkulja in the period. The trustee noted that Mr Trkulja had stated his income as $55,800 in an application to the ANZ Bank for a credit card dated 19 May 2000. He noted, also, that Mr Trkulja had acknowledged receiving cash at Fox Video business that was not recorded in the books and records of the business.
In the review of the contribution assessment by the respondent the lack of accurate information or response to a request for further information was noted. The respondent considered that some of the amounts included by the trustee from credit cards may have been double counted and that it was possible that some deduction for expenses might be appropriate. It was noted that Mr Trkulja had acknowledged the non-accounting for all cash receipts by the business of Fox Video and that no proper financial records for the business were available. It was noted, further, that it was not possible to determine the income of Fox Video nor the amount made available for the use of Mr Trkulja. The respondent based the amounts on the amounts represented by Mr Trkulja as being his income in applications for credit cards. In an application to Citibank on 15 March 2000 he showed $58,500; to the ANZ Bank on 19 May 2000 he showed $58,396; and, in a further application to the ANZ Bank, $55,800. In the assessment there was an allowance for income tax of $6240, being the amount shown by Mr Trkulja in his statement of income. It was noted that it was likely that additional cash amounts of income above that shown by him would impact on his income, but not his taxation liability. The calculation of the income contribution assessment of the respondent was:
GROSS INCOME 58,500
INCOME TAX _6,240
52,260
ACTUAL INCOME TAX THRESHOLD 34,398
17,862
DIVIDE BY 2 8,931
The respondent submitted that Mr Trkulja’s actual income was more likely to be greater, not less than the assessment y the respondent.
Mr Trkulja readily maintained that amounts he had shown as income on applications for credit cards were not correct. In relation to outgoings on credit cards he maintained that much of the expenditure consisted of business related expenses which were reimbursed subsequently. He also maintained that a large number of transactions related to his activities in collecting and distributing charitable funds for the benefit of people in his country of origin, Serbia, and transferring funds on behalf of other Australian residents to relatives in Serbia. He provided evidence of donations to the Serbian Democratic Party and letters from two organisations, BEO Export Australia Pty Ltd and Balkan Express Export, advising that he had acted as agent for them in their money-transfer services. However, there is no evidence or reconciliation showing the quantum of such funds, if any, which passed through Mr Trkulja’s credit card or bank accounts. In the absence of any accounting records of Fox Video or Mr Trkulja, neither was there any evidence or reconciliation of amounts said to be reimbursed business expenses.
Mr Morton submitted that Mr Trkulja’s claim in relation to receiving funds for transfer or donation to Serbia could not be substantiated. It was said that his lifestyle required a high level of income. Mr Morton said that Mr Trkulja showed the ownership of a Mercedes Benz and other property in his credit card applications; and that an analysis of credit card statements showed considerable amounts of personal expenditure, vehicle expenditure, travel and restaurants. It was noted that, in the two weeks before filing his debitor's petition, he withdrew $71,720 in cash from various credit cards. Mr Morton submitted that it could be implied that Mr Trkulja deliberately drew that substantial amount of cash knowing that he was about to file for bankruptcy.
Given the lack of information and evidence available to the Tribunal in seeking to calculate the likely income of Mr Trkulja in the period 4 September 2000 to 3 September 2001, it is virtually impossible to do so. Given the history of Mr Trkulja in failing to provide information, failing to maintain financial records, his evasiveness and, at times, contradictions when under examination and speaking in generalities rather than specifics at the hearing, his evidence cannot be accepted. I am satisfied that his income in the relevant period was in excess of that claimed by him to be income in his statement filed with the trustee and that disclosed in his income tax returns for the reasons argued by the trustee and the respondent. On the other hand, I am satisfied that the trustee's assessment, on the basis on which it was calculated, was excessive. I am inclined to agree with the respondent that, if anything, the respondent’s assessment was likely to have been low. Nevertheless, the respondent’s assessment was based on a signed application for credit by Mr Trkulja, albeit at a time prior to his bankruptcy and the commencement of the contribution assessment period. I acknowledge that, pursuant to s139X of the Act, the trustee may disregard information provided by the bankrupt and make an assessment on the basis of what the trustee considers to be the correct information where he considers the information provided by the bankrupt is or may be incorrect. However, I do not believe that this empowers the trustee to simply add up the total expenditure of the bankrupt during the period and assume that it represented income. Given the circumstance of this case, I am of the view that the respondent’s assessment should be affirmed on the understanding that there was little or no change in Mr Trkulja's circumstances between March and May 2000 and September 2001. Consequently, the decision in relation to the income contribution assessment should be affirmed.
The result of the foregoing is that the decision of the respondent of 16 September 2003 should be varied to the extent of setting aside that part of the decision relating to s149D(1)(n) and in its stead cancelling that ground of objection. The decision of 24 October 2003 should be varied to the extent of setting aside that part of the decision relating to s149D(1)(b) and 149D(1)(f) and in its stead cancelling the two grounds for objection. The decision of 12 December 2003 relating to the income contribution assessment should be affirmed. The effect of these decisions is that there remain confirmed objections to the discharge from bankruptcy of Mr Trkulja under sections 149D(1)(b), 149D(1)(c) and 149D(1)(d).
I certify that the twenty‑seven[27] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr B.H. Pascoe, Senior Member
(sgd) Catherine Thomas
Clerk
Dates of Hearing: 19 November 2004
10‑11 May 2005
Date of Decision: 26 July 2005
Advocate for Mr Trkulja: Self‑represented
Advocate for Mr Morton: Self‑representedSolicitor for the respondent: Mr G. Carroll, Australian Government Solicitor
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