Wortman and Inspector-General in Bankruptcy

This matter concerned a review by the Administrative Appeals Tribunal of a decision by the Inspector-General in Bankruptcy (IG in B) to confirm a trustee's objection to a bankrupt's discharge. The applicant, the bankrupt, sought to challenge the trustee's decision, which had been confirmed by the IG in B. The Tribunal, with the consent of the parties, restricted the hearing to a single ground of objection, which if upheld, would render further lengthy hearings unnecessary.

The legal issues before the Tribunal were whether the trustee was entitled to issue a notice of objection based on a "special ground" under section 149D(1)(ia) of the *Bankruptcy Act 1966* (Cth), specifically the bankrupt's failure to comply with section 77(1)(a)(ii) by not forthwith providing a passport to the trustee. The Tribunal was also required to determine whether the bankrupt had established a reasonable excuse for this non-compliance, as contemplated by section 149N(1A)(c) of the Act.

The Tribunal reasoned that a contravention of section 77(1)(a)(ii) constitutes a "special ground" for objection under section 149D(1)(ia). It found that there was sufficient evidence to support the existence of this special ground. Crucially, under section 149N(1A), an objection on a special ground cannot be cancelled if the bankrupt fails to establish a reasonable excuse for the conduct constituting that ground. The Tribunal noted that the onus of proving a reasonable excuse rests with the bankrupt.

The Tribunal concluded that the notice of objection specified a special ground and that there was sufficient evidence to support its existence. The final matter for consideration was whether the bankrupt had established a reasonable excuse for failing to provide the passport. If the bankrupt failed to establish a reasonable excuse, the IG in B and the Tribunal were required to confirm the objection, as section 149N(1A) removes administrative discretion in such circumstances.