FEDERAL COURT OF AUSTRALIA

Wondal v Inspector-General in Bankruptcy [2018] FCA 1278

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The applicant pay the respondent’s costs as assessed or agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

Introduction

1    This is an appeal by application in the original jurisdiction of this Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) from a decision of the Administrative Appeals Tribunal on questions of law.

2    The applicant, Ms Susiani Wondal, applied to the respondent, the Inspector-General in Bankruptcy, for a review of the amount of remuneration claimed by her trustees in bankruptcy. The application was required to be made within 28 days of receiving notification of the trustees’ claim. The application was made 24 days late. The Inspector-General had a confined discretion to extend the period in which an application for review may be made. A delegate of the Inspector-General declined to exercise that discretion.

3    The applicant applied to the Tribunal for merits review of the delegate’s refusal to extend the period for making the application for review. The Tribunal conducted a hearing and affirmed the delegate’s decision, giving ex tempore reasons. The applicant has since applied to this Court seeking to appeal from the Tribunal’s decision. The transcript of the Tribunal hearing has been treated in this proceeding as constituting a statement of reasons.

4    For the reasons set out below, the appeal must be dismissed.

5    Before turning to the background of this proceeding, it should be recorded that the Court is grateful for the able assistance of Mr Sean Docker of counsel, who accepted a referral to act on behalf of the applicant under the Court’s pro bono scheme.

Background

6    The applicant was born in Indonesia in 1951 and came to Australia in 1974. She has been living here for over 40 years. She speaks Indonesian at home. Although she can read English, she is not proficient in the language.

7    The applicant was made bankrupt on 27 October 2014. She filed a statement of affairs late, on 2 June 2015, which revealed that she owned units in Bankstown and Ashfield, which she estimated to be worth $625,000 and $550,000 respectively. She had no secured creditors, but significant amounts of unsecured debt owed to various banks.

8    The trustees’ second report to creditors was prepared in June 2016. The report relevantly stated that the Ashfield unit had been sold in August 2015 for $570,000, and that the Bankstown unit had been sold in April 2016 for $490,000. By the time of that report, dividends totalling $0.86 in the dollar had been paid to creditors’ claims of $654,084.

9    On 8 June 2016, the trustees issued a remuneration claim notice for $175,247.55 (including GST) for the period 27 October 2014 to 6 June 2016. It was this remuneration claim that the applicant sought to have reviewed. On the same day, 8 June 2016, the trustees issued a remuneration approval notice for further fees of $74,718.60 (including GST), including fees already incurred between 27 August 2015 and 6 June 2016 of $63,828.60 (including GST).

10    In part at least, the quantum of the trustees’ fees relative to the size of the bankrupt estate appears to be attributable to a somewhat obstructive approach taken by the applicant to the administration of her bankruptcy. A further contributing factor of significance was the level of fees charged by the trustees, with the delegate appearing in person at the Tribunal hearing describing the rates charged as being the highest in Australia. As outlined in greater detail below, the delegate did, however, carry out a three-hour inspection of the trustees’ file and, as he told the Tribunal, only located one billing error.

The trustee remuneration regime under the Bankruptcy Regulations 1996 (Cth)

11    The relevant portions of the Bankruptcy Regulations 1996 (Cth) were repealed on 1 September 2017, but remain applicable in this proceeding by reason of transitional provisions. Apparently, there is no case law on the meaning of the key provisions, and it is unlikely that there will be at any time after this decision given their repeal. It is convenient to reproduce those provisions in full, emphasising the key passages, so as to provide the necessary context:

8.12E Application for review—remuneration

(1)    A bankrupt or a creditor of the bankrupt (the applicant) may apply to the Inspector-General for a review of the amount of remuneration claimed by the trustee.

(2)    The application must be in writing and must, subject to subregulation (3), be made within 28 days after the day the applicant receives notification under regulation 8.12C.

(3)    The Inspector-General may, before or after the end of the 28 days mentioned in subregulation (2), extend the period in which an application for review may be made if the Inspector-General is satisfied that:

(a)    the applicant and the trustee have been engaged in an alternative dispute resolution process to try to resolve the matter; or

(b)    it is appropriate, in all the circumstances, to extend the period.

(4)    The Inspector-General may extend the period for any period the Inspector-General considers appropriate in all the circumstances.

(5)    The applicant may apply to the Administrative Appeals Tribunal for the review of a decision by the Inspector-General under subregulation (3) to refuse to extend the period in which an application for review may be made.

(6)    The trustee may apply to the Administrative Appeals Tribunal for the review of a decision by the Inspector-General under subregulation (3) to extend the period in which an application for review may be made.

8.12F Application threshold

(1)    The Inspector-General must refuse to accept an application:

(a)    unless the Inspector-General is satisfied on reasonable grounds that 1 or more of the following apply:

(i)    the trustee’s remuneration may have been fixed in a manner that is inconsistent with the requirements of the Act or these Regulations;

(ii)    the trustee may have acted improperly, or without due care and diligence, in the administration of the estate; or

(b)    if the Inspector-General is satisfied on reasonable grounds that:

(i)    the applicant does not have an interest in the outcome of the review; or

(ii)    the applicant has not adequately particularised the issue giving rise to the review; or

(iii)    the application is frivolous or vexatious.

(2)    However, the Inspector-General may accept an application if the Inspector-General is satisfied that there are exceptional circumstances to justify the review.

(3)    The Inspector-General may refuse to accept an application if the Inspector-General is satisfied on reasonable grounds that:

(a)    it was appropriate in all the circumstances for the applicant to attempt to resolve the matter without seeking a review under this Subdivision; and

(b)    the applicant did not do so; and

(c)    the applicant did not provide a reasonable explanation for not doing so.

The trustees’ remuneration claim notice

12    On 14 June 2016, the applicant received the trustees’ remuneration claim notice dated 8 June 2016. As noted above, the claim was for $175,247.55 ($159,315.95 plus GST). Attached was a summary of the time spent, a summary of the remuneration which the claim advised had been approved (by creditors) on 3 August 2015, and a summary of receipts and payments in the administration. A table in the notice itself set out variations between the claim and the approval notice, with there being no variation as to the amount, but small variations as to the number of hours charged (reduced from 335.05 hours to 333.25 hours) and as to the average hourly rate charged (increased from $475.50 to $478.07, both excluding GST).

13    The attachments to the claim contained only lump sum figures attributable to various trustee staff. They were not at all illuminating as to what work had been done, which limited the capacity of the applicant to make a meaningful application to review the amount of remuneration charged. The trustees were not obliged to provide more information, but the decision to provide only gross figures meant that the claim and the summaries were essentially meaningless to anyone attempting to ascertain whether the remuneration sought was reasonable. Even the delegate had to see the trustees’ files to be able to form any view in that regard.

14    The last paragraph of the claim form stated:

Right to review

Within 28 days after receiving this notice, you may request the Inspector-General to review the amount of remuneration claimed. Requests for review should be marked to the attention of AFSA regulation and be addressed to GPO Box 548, Sydney NSW 2001.

15    That notice was in accordance with the very limited requirements of reg 8.12C(5), which provided as follows:

A notice under subregulation (1) or (3) must also include a statement advising the bankrupt and the creditors that they may, within 28 days after receiving the notice, request the Inspector-General to review the amount of remuneration claimed by the trustee.

The application for review and its refusal

16    On Friday, 5 August 2016, the applicant lodged an application for review of the trustees’ remuneration by the Inspector-General. The stated grounds were as follows (verbatim, including as to punctuation):

1. Trustee Charge fee very high $175,248.00 Plus, I am not a business person I just have unsecured credit

2. Trustee not fair he just give away and finish it my money from two Real Property Worth $ 1060,000.00 one of property they sold it under value and charge me unnecessary fee

3. Suppose all my unsecured credit from Mayor Bank but now Broker take over and they charge me more suppose to ,Bank already stop the interest but they charge more

4.my unsecured credit about $ 400,000.00 Bank over me 50 % discount for my unsecured credit

5. From the beginning they use Court Power ,and Judge Power to force me Bankrupt ,Trustee say like to do composition for my unsecured credit but they did not do it

6. I did not get free Real Property ,I bought my first home 35 years ago from bring money from my Country now they take my home and nobody want to know how I live

7.I did not involve nor associate with that crime group they just make innocence people suffer

8. I have wait six Month live in the street without home ,hoping to get left over money from two my Real Property to buy another one but nothing no money

9. That group cannot get Title Deed on my Property I have keep ,they break ,give away and take my goods instated and destroy my life and the goods I have keep for 65 years and my memorable and valuable goods

10.Real Estate agent cannot rent property to Bankrupt people.

17    Under reg 8.12E(2), the application was required to be made within 28 days, that is, by 12 July 2016. No reason was given in the application itself for it being late, although the applicant would later indicate to the Tribunal that she had proceeded on the basis that she had 60 days to apply for the review. In any event, the application to the Inspector-General was filed within that longer period of time.

18    Under reg 8.12E(3), the Inspector-General could extend the period in which the application for review could be made. On Monday, 8 August 2016, a delegate of the Inspector-General wrote to the applicant by way of a letter sent by email, advising of a decision to refuse to extend the time in which she could make an application for review. The delegate’s letter reproduced the applicant’s stated grounds for seeking the review, and set out the reasons for refusing her application, which were:

(1)    the lateness of the application (which was 24 days late), reproducing the text of reg 8.12E;

(2)    the fact that the applicant had not engaged in any alternative dispute resolution (which can be a basis for extending time, per reg 8.12E(3)(a)); and

(3)    failing to meet the threshold by which a review application may be accepted under reg 8.12F, reproducing the text of that regulation and further noting:

… you became bankrupt on 27 October 2014 but did not file a statement of affairs until 2 June 2015. The delay in filing the statement of affairs would have added to the costs and remuneration of the trustee.

Mr Scott also mentioned that possession proceedings were necessary to realise your property in Scott v Wondal [2015] NSWSC 1577 (26 October 2015). This would have undoubtedly have also added to the trustee’s costs and remuneration.

Mr Scott has also indicated that there is no likelihood of a surplus from the estate being paid to you.

…

19    The letter then reproduced extracts from the trustees’ report as to difficulties encountered in the administration of the applicant’s bankrupt estate.

20    The letter concluded with the following:

As there is unlikely to be a surplus in the estate I am not satisfied that even if a review was conducted, you would have an interest in the outcome.

Taking into account (a) the fact that the application was made out of time, (b) the fact that your own actions added to the trustees’ costs and remuneration and (c) the fact that you would not have an interest in the outcome and (d) the absence of exceptional circumstances justifying a review, I am not satisfied that it is appropriate to extend the time for you to make the application for a review of remuneration.

21    The following observations may be made about the above four reasons for the conclusion reached:

(1)    all four reasons went to the delegate’s absence of satisfaction under reg 8.12E(3)(b) that it was appropriate, in all the circumstances, to extend the period;

(2)    reason (c) additionally engaged the obligation in reg 8.12F(1)(b)(i) to refuse to accept an application in the absence of exceptional circumstances, as provided for in reg 8.12F(2); and

(3)    reason (d), which records a finding that there was an absence of exceptional circumstances, foreclosed there being any basis for the Inspector-General to otherwise accept the application.

Before the Tribunal

22    The hearing of the application for review of the Inspector-General’s decision came before the Tribunal on 26 June 2017. The applicant’s explanation for the delay in making her application to the Inspector-General was that she believed she had 60 days to do so, based on telephone advice she had received from a solicitor and her own internet research.

23    In its ex tempore reasons, the Tribunal observed that the applicant did not have a good reason for the delay in bringing her application to the Inspector-General, as she had been clearly notified by letter that she had 28 days to review the trustees’ notice, and had not sought to clarify any bad advice with the Inspector-General. Moreover, the Tribunal observed that there seemed to be little prospect in any event of the charges changing upon a review. In those circumstances, the Tribunal member was not satisfied that it was appropriate to grant the extension of time and refused the application.

The grounds of appeal in this Court

24    By an amended notice of appeal, the applicant posed nine questions of law with nine corresponding grounds of appeal flowing from the Tribunal’s decision to affirm the decision of the Inspector-General. Four of those grounds of appeal were abandoned (being grounds 2, 5, 8 and 9), such that the corresponding questions of law are not agitated. The five remaining grounds and questions of law will be dealt with in turn.

25    By way of a global submission, the Inspector-General submits that the Tribunal was right to affirm the decision of the Inspector-General not to extend the time in which to make an application for review because:

(1)    the applicant had no interest in the outcome of any review;

(2)    due to that fact, the Inspector-General had to refuse the application under reg 8.12F(2)(b) unless there were exceptional circumstances to justify a review, in which case the Inspector-General nonetheless had a discretion to refuse the application; and

(3)    there were no exceptional circumstances.

26    The Inspector-General says of reg 8.12F that:

(1)    if the applicant does not have an interest in the outcome of the review or the applicant has not adequately particularised the issue giving rise to the review, the Inspector-General must refuse the application for review;

(2)    however, if the Inspector-General is satisfied on reasonable grounds that there are exceptional circumstances to justify the review, the Inspector-General may nonetheless accept the application;

(3)    in any event, the Inspector-General has a discretion to refuse an application if satisfied that it was appropriate for the applicant to attempt to resolve the matter without seeking a review, and failed to do so without a reasonable explanation.

27    The Inspector-General points out that the Tribunal found that there was no likelihood of a surplus from the estate, such that her application was caught by reg 8.12F(1)(b)(ii). That finding was based on a significant amount of evidence and has not been challenged in this proceeding. In those circumstances, it must be accepted at the outset that the Tribunal was correct to take the view that there was no point in granting an extension of time unless there were exceptional circumstances to justify the review.

Ground 1: denial of procedural fairness

28    The applicant asserts that the Tribunal failed to give the applicant a reasonable opportunity to address the question of whether there were exceptional circumstances to justify the Inspector-General undertaking the review under reg 8.12F(2) of the Bankruptcy Regulations. Instead, she complains, the Tribunal and the Inspector-General’s representative discussed this issue and the Tribunal appeared to accept a submission, based on the Inspector-General’s practice statement, that there were no exceptional circumstances in this case. That practice statement gave some examples of exceptional circumstances, which included when an applicant can provide evidence of errors by the trustee, when there have been systematic and justified complaints to Australian Financial Security Authority about the trustee’s conduct, and when there is evidence of inefficiency or inappropriate billing practices.

29    The applicant complains that the issue of exceptional circumstances was not raised with her. She submits that while the discussion that took place might have been sufficient to put her on notice and give her a chance to respond had she been legally represented, it was not enough in circumstances where she was self-represented. The applicant submits that it was necessary for the Tribunal to specifically raise the issue of exceptional circumstances with her, especially given that, while circumstances have to be more than regular, routine or normally encountered to be exceptional circumstances, they do not have to be unique or very rare, citing Leighton International v Hodges [2012] NSWSC 458 at [19]-[20].

30    The applicant submits that the present circumstances were exceptional in the relevant sense, particularly given their character as circumstances relevant to the supervision of trustee’s remuneration and overcharging, which she says is a central purpose of the review provisions. The applicant places reliance on the fact that the Inspector-General’s representative said that the fees charged by the trustees were exceedingly high, and that the trustee’s firm was the most expensive in Australia. She asserts that her submissions before the Tribunal were detailed, raising questions as to why two people from the trustees’ firm had to be present at court during the litigation in bankruptcy. She also points out that an error had been found in the course of a cursory review of the trustees’ file.

31    In response, the Inspector-General submits that there is no fixed content to the duty to provide procedural fairness, with the fairness of the procedure depending on the nature of the matters in issue. It is said that what is required is a reasonable opportunity for the parties to present their cases in the relevant circumstances, citing Kioa v West (1985) 159 CLR 550 at 585. In that decision, Mason J observed that the expression “procedural fairness” conveys “the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case”. Thus, the Inspector-General submits, whether there has been a denial of procedural fairness is a matter of “practical injustice”, citing Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [34], [38]. The Inspector-General described the circumstances that presented themselves in this case, and thus the circumstances that had shaped the content of the relevant duty, as follows:

(1)    the original decision set out the terms of reg 8.12F, including subregulation (2), which contains the discretion to accept an application for review if the Inspector-General is satisfied that there are exceptional circumstances;

(2)    immediately after setting out the terms of reg 8.12F, the Inspector-General’s decision stated that the applicant had not put anything in the application to suggest that any of the criteria in the regulation applied apart from the high level of remuneration, which was probably explained by the history of the bankruptcy;

(3)    it was explicitly stated in the conclusion of the Inspector-General’s decision that one of the reasons the application for an extension of time was being refused was the absence of exceptional circumstances justifying the review;

(4)    in circumstances where the original decision-maker had expressly decided that there were no exceptional circumstances, the applicant could not have failed to appreciate that this was an issue for determination in the review of that decision by the Tribunal;

(5)    several months in advance of the hearing before the Tribunal, the applicant was served with material relied upon by the Inspector-General, which included the practice note, setting out three examples of things that ought to be regarded as “exceptional circumstances”; and

(6)    in the Inspector-General’s statement of facts, issues and contentions dated 29 March 2017, it was submitted that “there is no evidence that the threshold for conducting a review at regulation 8.12F has been met”, and also that there were no exceptional circumstances justifying review, together with the observation that while the remuneration was very high, this was explained to a large extent by the lack of cooperation by the applicant.

32    The Inspector-General submits that, accordingly, by the time the matter came to an oral hearing before the Tribunal, the applicant had received clear notice that a key issue for determination was whether there were exceptional circumstances to justify the review. The applicant was also on notice that the Inspector-General intended to rely on the terms of the practice statement. Accordingly, the applicant could not (perhaps more accurately, should not) have failed to appreciate the importance of the issue of exceptional circumstances.

33    The Inspector-General submits that, when placed in context, the discussions at the Tribunal hearing regarding “exceptional circumstances” and the Inspector-General’s practice note were no more than a consideration of the matters that had been notified to the applicant as being of central importance. It is said that those discussions were not conducted in a manner that precluded the applicant from making submissions on the issue if she had wished to do so. The Inspector-General submits that the transcript disclosed that the Tribunal member went to some lengths to assist the applicant in understanding the issues being considered and in no way prevented her from putting her case. The Inspector-General therefore submits that, in all the circumstances, there was no requirement that the Tribunal do more to ensure that she was afforded procedural fairness. In support of that conclusion, the Inspector-General cited the decision of Mason P in Victims Compensation Fund Corporation v Nguyen [2001] NSWCA 264; 52 NSWLR 213 at [37], where his Honour observed:

… the obligation of procedural fairness is concerned with providing a person whose rights are potentially affected in a matter with the opportunity to deal with relevant issues. A party’s failure to make proper use of that opportunity is not the concern of this branch of the law …

34    The Inspector-General further submits that the Court should reject the applicant’s argument to the effect that she could have made submissions that may have affected the outcome in relation to the question of the merits of the application. It is submitted that:

(1)    the Inspector-General’s review functions do not include regulation of the charge-out rates of trustees;

(2)    the majority of the changes that were made were for work done by much cheaper staff under a hierarchical staff structure;

(3)    this information was placed before the Tribunal in any event, and it may be inferred that the Tribunal did not consider that it changed the decision and rightly did not regard this as constituting an exceptional circumstance; and

(4)    the gist of the applicant’s oral submissions to the Tribunal was that the amount of remuneration being claimed was too high and nothing more.

35    Considering all of the circumstances as a whole, the Inspector-General’s submissions should be accepted. While it is true that, although present, the applicant was not a direct party to the discussions that took place at the Tribunal hearing, this must be considered in context. The relevant context was that the question of exceptional circumstances was front and centre in the review, in circumstances where the delegate of the Inspector-General had found that, due to there being no possibility of a surplus, the applicant lacked an interest in the outcome of any review, which was a finding that would ordinarily preclude extending time. Viewed in that context, the requirements of procedural fairness were amply met. It would be artificial in the extreme to require the Tribunal to laboriously restate the contents of the review papers, which the applicant had a copy of in advance, and the entire context in which the original decision had been made, these being an essential part of the subject matter of the applicant’s merits review application. This ground of appeal must therefore fail.

Ground 3: no evidence

36    The applicant asserts that there was no evidence to support the Tribunal’s findings that:

(1)    there was little prospect of the remuneration of the applicant’s trustees changing on review; and

(2)    there seemed to be little prospect of success in the review application.

37    It is not in doubt that the question of whether there is any evidence of a particular fact is a question of law for the purpose of appeals under s 44 of the AAT Act: see Fisse v Secretary, Department of Treasury [2008] FCAFC 188; 172 FCR 513 at [46] and the cases there cited and quoted. The applicant submits that this ground requires consideration to be given to what evidence was before the Tribunal, which was not necessarily an easy task, given that a clear distinction was not drawn between evidence and submissions at the Tribunal hearing. The applicant submits that, although the Tribunal was not bound by the rules of evidence, submissions made from the Bar table should not be treated as evidence, especially as the Tribunal made no ruling or statement that it would treat submissions before it in that manner.

38    The applicant characterised the following as findings made by the Tribunal:

(1)    the applicant had no clear idea about what she thought would be a correct amount for remuneration;

(2)    it seemed that there was little prospect of the charges in the remuneration notice changing in any substantial way;

(3)    it was unlikely that there would be any real benefit to the applicant if a review was undertaken;

(4)    the applicant had no interest in the outcome; and

(5)    there seemed to be little prospect of success for the review application.

39    The applicant submits that there was no evidence to support the third and fifth findings that it seemed that there was little prospect of the charges in the remuneration notice changing in any substantial way and that there seemed to be little prospect of success for the review application. The applicant submits that these findings appear to be based on submissions by the Inspector-General’s representative, rather than evidence. That representative had made the submission that “… even if I was to perform a review, I don’t think the outcome would be any different to the current situation and in any case”, together with other similar submissions. It is emphasised that those submissions were based on the representative’s review of the trustees’ file on 12 January 2017, in circumstances where that file was not before the Tribunal and there was no detail of what had been looked at. The applicant therefore submits that it would be procedurally unfair to the applicant to treat those submissions as evidence.

40    The applicant also referred to submissions being made to the effect that judgments in other aspects of the bankruptcy had found no fault with the trustees. It is submitted that those judgments did not bear on the question of whether the claimed remuneration was excessive, given that they concerned an application to review the making of the sequestration order and an application to dismiss the defence filed by the applicant in proceedings in the Supreme Court of New South Wales for possession of one of the applicant’s units. This collateral submission may be disposed of immediately. The need for litigation in the administration of the bankruptcy and the necessary costs in doing so must be seen as being directly relevant to the remuneration charged by the trustees.

41    In opposing this ground, the submissions for the Inspector-General pointed to the important distinction between a finding that is based on no evidence and a finding that, whether right or wrong, is nevertheless based on some evidence. Reliance is placed on the observations by Mason CJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-6 that, in the context of judicial review, while it has been accepted that the making of findings and the drawing of inferences in the absence of evidence is an error of law, there is no error of law in simply making a wrong finding of fact, citing in turn Waterford v Commonwealth (1987) 163 CLR 54 at 77. In those circumstances, the Inspector-General points out that neither party adduced sworn evidence in the proceedings before the Tribunal and nobody was cross-examined, with the applicant relying upon her unsworn statements from the Bar table as to her reasons for being late in applying for a review of the trustees’ remuneration claim. It is submitted that, in those circumstances, it is inconsistent for the applicant to now argue that it was unfair for the Tribunal to permit the Inspector-General to rely upon his representative’s statements regarding his informal review of the trustees’ charges. The Inspector-General places particular reliance on the observation by Hill J in Casey v Repatriation Commission (1995) 60 FCR 510 at 514E, where his Honour observed that s 33 of the AAT Act meant what it said, namely, that the fact that material may be inadmissible in accordance with the laws of evidence does not mean that it cannot be admitted into evidence by the Tribunal or taken into account by the Tribunal. Rather, the criterion for admissibility of material in the Tribunal is to be found within the limits of relevance rather than the rules of evidence. The Inspector-General submits that the Tribunal was therefore permitted to take into account the factual matters stated by both the applicant and the Inspector-General’s representative. In particular, the Tribunal was entitled to take into account the information given to it at the Tribunal hearing to the effect that the Inspector-General’s representative had spent about three hours going through the file with a copy of the trustees’ bill of charges and looked for any charges that were unnecessary or unreasonable. Only one such item was found, which was brought to the trustees’ attention and the remuneration reduced by $800 as a result.

42    The Inspector-General therefore submits that it would be wrong to suggest that the Tribunal’s basis for its finding that any review application would enjoy little prospect of success was limited to the fact that a de facto review had been carried out by the Inspector-General’s representative. Rather, it was appropriate for the Tribunal to have some regard to the underlying merits of the review application itself and to accept, as a general proposition, that the high level of remuneration claimed was substantially the result of the applicant’s history of obstructing the trustees in their administration of the bankrupt estate. That history was set out in the Inspector-General’s statement of facts, issues and contentions, which included reference to two sets of legal proceedings and to the trustees having to have the applicant forcibly removed from premises on two occasions. Thus, the Inspector-General submits, the Tribunal’s finding was one that was based on the material that was before it. It is said to follow that there was no error of law.

43    The “no evidence” ground of review is difficult to sustain in circumstances where there is some evidence or other material upon which the conclusion reached by the Tribunal could be based. That distinction is required to be strictly observed if this Court is to avoid straying into impermissible merits review. In the absence of legal unreasonableness, which has not been suggested, such a conclusion is a matter for the Tribunal and not for this Court. Having reviewed the material that was before the Tribunal and having considered carefully the Tribunal’s ex tempore reasons, I am unable to accept that there was an absence of any basis in the material before the Tribunal upon which the conclusions complained of could be reached. It is not to the point that a different conclusion might have been reached in all of the circumstances. What matters is that the Tribunal did not proceed without a factual substratum for its findings. Accordingly, this ground of appeal must fail.

Ground 4: failure to consider submissions going to exceptional circumstances

44    The applicant asserts that the Tribunal did not consider the applicant’s submissions as to why the trustees’ remuneration was excessive. It is argued that these submissions were capable of affecting the outcome of the case insofar as they were relevant to whether there were exceptional circumstances to justify the review and the matters raised in the “no evidence” ground above. The substance of this ground turns on the absence of any express reference by the Tribunal to the submission made by the applicant in writing that the level of remuneration claimed was excessive, with particular reference to two people from the trustees’ firm being present in court during litigation in the course of the administration.

45    The Inspector-General’s response is that the applicant’s written submissions to the Tribunal did not sensibly advance her position beyond anything that she said during the oral hearing. Those written submissions did not put anything that could be meaningfully considered by the Inspector-General in a review of the trustees’ remuneration. Rather, the Inspector-General submits, the written submissions by the applicant were dominated by what is described as a “series of ill-defined, unsubstantiated but nonetheless highly scandalous allegations about the trustees and other persons”. By contrast, the Inspector-General’s written submissions to the Tribunal were to the effect that the material provided by the applicant did not make out a cogent case for an extension of time to be granted. The Inspector-General submits that the Tribunal was entitled to act upon those submissions and did not have a duty to give reasons as to why plainly misdirected submissions were rejected. It is only a failure to consider a submission worthy of serious consideration that can constitute an error of law.

46    The Inspector-General submits that the only point of potential substance in the applicant’s written submissions was also made orally, namely, that she disputed the need for two representatives of the trustees’ firm to appear at certain court hearings. However, the Inspector-General submits that this was a very minor item of expenditure and, for that reason, could not of itself constitute “exceptional circumstances”. In any event, the Inspector-General submits, this complaint was expressed in the abstract. Without any context for the appearances having been given, it is hard to know what should be made of the applicant’s assertion that only one representative from the trustees’ firm was required in court. The Inspector-General therefore submits that, in the circumstances, there were reasonable grounds upon which the Inspector-General, and the Tribunal standing in the shoes of the Inspector-General, could be satisfied that the applicant had not adequately particularised the issues giving rise to her application for review, as required by reg 8.12F(1)(b)(ii).

47    The applicant’s submissions, if accepted, would demand an excessive degree of detail in the reasons given by the Tribunal in circumstances where it was for the applicant to make out a case of exceptional circumstances. That was plainly the live issue and hurdle that she needed to surmount. Globalised objections to the level of remuneration and an objection to a single item of expense, without any explanation as to why it was inappropriate or otherwise excessive, were not the sort of matters that required individual attention in the Tribunal’s reasons. The substance of the applicant’s case was plainly considered by the Tribunal and was found to fall short of the threshold of exceptional circumstances. The Tribunal was not required to engage in a line-by-line consideration and repudiation of the written submissions for the applicant. This ground of appeal must therefore fail.

Ground 6: failure to give adequate reasons

48    The applicant asserts that the Tribunal failed to give adequate reasons for its decision because it failed to explain how it reached its findings that:

(1)    there were no exceptional circumstances to justify a review of the trustees’ remuneration claim notice (if this finding was made);

(2)    there was little prospect of the remuneration of the applicant’s trustees changing on review; and

(3)    there seemed to be little prospect of success for the review sought.

49    There is no doubt that giving inadequate reasons can constitute an error of law. The applicant submits that, in order to be adequate, reasons must make it possible to understand the Tribunal’s reasoning process so as to make the appeal process contemplated by s 44(1) of the AAT Act efficacious. The applicant submits that the absence of reasons on the particular matters complained of deprives the appeal of efficacy because it is not possible to ascertain how the Tribunal reasoned to those conclusions. The applicant submits that the Tribunal could have simply accepted the submission made on behalf of the Inspector-General, it could have analysed the charges, or it could have taken some other path to its findings. However, the transcript constituting the reasons does not reveal the path that was taken.

50    The Inspector-General counters by submitting that, while the Tribunal’s reasons were not set out in a separate judgment, there is no difficulty in identifying the reasoning as follows:

(1)    the Tribunal did not regard the explanation for the application being out of time to be very strong;

(2)    even if the applicant’s explanation was accepted, there was little prospect of a review changing the result;

(3)    even if there was a change in remuneration from the review, the applicant would not get this benefit as it was not going to be a surplus;

(4)    it was therefore necessary for there to be exceptional circumstances to justify the review before the Inspector-General’s discretion to accept the invitation could be enlivened;

(5)    there were no exceptional circumstances to justify the review;

(6)    the applicant did not attempt to resolve her complaints with the trustee; and

(7)    the decision should therefore be affirmed, as it was not appropriate in the circumstances to extend the period in which an application for review could be made.

51    The Inspector-General submits that the submissions made by the representative at the Tribunal hearing were accepted and that there is no basis for any suggestion that the Tribunal took some other path or privately analysed the charges on a line-by-line basis. To the contrary, the transcript suggests that the Tribunal did not regard that as its role.

52    The applicant has not made out her suggestion that the reasons given by the Tribunal were inadequate to explain its conclusions. While the reasons were not separately published and were certainly not detailed, the issues were within a narrow compass and were adequately dealt with by the Tribunal, with sufficient reasons given. It is clear enough that the applicant had not made any substantial case for review beyond an objection to the overall level of remuneration, articulating only some relatively minor points in support of that view. Given that she was put squarely on notice that the original decision-maker had found there to be an absence of exception circumstances, it was for the applicant to bring a case to demonstrate that the Inspector-General’s conclusion should not be reached again. She failed to do so. The Tribunal’s reasons were adequate in all of the circumstances. This ground of appeal must fail.

Ground 7: misconstruing the test for an extension of time

53    The applicant asserts that the Tribunal misconstrued reg 8.12E(3)(b) of the Bankruptcy Regulations by finding that it did not have to take account of the applicant’s explanation for the delay, and that it was necessary for the applicant to have a very strong reason for the delay. The applicant submits that, although the Tribunal’s discretion was broad, it was not open to the Tribunal to ignore the explanation given for the delay, especially as there was no challenge to its factual veracity.

54    The Inspector-General submits that the Tribunal was right to describe the applicant’s explanation for her delay as not a very strong one. The Inspector-General says of the applicant’s explanation that:

(1)    the applicant could not explain why she was prepared to accept advice from a solicitor that she had 60 days in circumstances where she had a letter from the trustees stating that she had to bring any such application in 28 days;

(2)    despite having apparently received contradictory advice, the applicant did not contact the Inspector-General to check the correct position; and

(3)    the applicant did not give any evidence as to why she even sought advice from any solicitor as to the period of time in which an application had to be made when she had already received a letter that stipulated a 28-day period.

55    The Inspector-General points out that, contrary to the applicant’s submissions, the fact that the Tribunal described the explanation for delay as not being very strong did not mean that the Tribunal proceeded on the basis that the explanation had to be a very strong one. Rather, it is clear from the transcript that the cornerstone of the Tribunal’s reasons for decision is that the applicant did not have an interest in the outcome of the review. The relevant effect of this finding was that there needed to be exceptional circumstances to justify the review.

56    A careful and beneficial reading of the transcript reveals that the Tribunal did not go so far as to say that it did not have to take account of the applicant’s explanation, as opposed to regarding the explanation as having little weight because, in effect, it made little sense. Nor should the Tribunal’s reasons be read as setting a legal standard requiring the applicant to show a very strong reason for the delay. Rather, the Tribunal should be understood as treating the applicant as having advanced no real reason for the delay such that her explanation did not advance her case on the review. There was no error in this approach. This ground of appeal must therefore fail.

Conclusion

57    As all of the grounds of appeal must fail, the appeal must be dismissed. There is no reason why costs should not follow the event. Accordingly, the applicant must pay the Inspector-General’s costs.

Associate:

Dated:    24 August 2018