FEDERAL COURT OF AUSTRALIA
Schiffer v Pattison [2001] FCA 1094
ADMINISTRATIVE LAW - appeal under s 44(1) of Administrative Appeals Tribunal Act 1975 (Cth) - litigant in person – whether Tribunal failed to afford procedural fairness – whether Tribunal failed in any duty to advise of the nature of the decision under review and of review rights – whether Tribunal required to adjourn hearing or advise applicant of right to seek an adjournment – whether Tribunal took into account irrelevant considerations – whether Tribunal may consider evidence not relied on by the primary decision-maker – function of the Tribunal – oral reasons for decision under s 43(2) of the Administrative Appeals Tribunal Act
BANKRUPTCY – notice of objection to discharge –whether Tribunal failed to discharge its statutory task in reviewing trustee’s decision
Bankruptcy Act 1966 (Cth), s 149B, s 149Q
Administrative Appeals Tribunal Act 1975 (Cth), s 25 s 37, s 43, s 44
Schiffer v Pattison (2000) 177 ALR 754 referred
Sullivan v Department of Transport (1978) 20 ALR 323 applied
Titan v Babic (1994) 49 FCR 546 applied
Inspector-General v Nelson (1998) 86 FCR 67 discussed
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 referred
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 applied
Fitz-Gibbon v Inspector-General in Bankruptcy [2000] FCA 1677 followed
Re Woodman & Inspector-General in Bankruptcy (1996) 22 AAR 508 referred
Re Hall (1994) 14 ACSR 488 distinguished
Re Ansett; Ex parte Ansett v Pattison (1995) 56 FCR 526 distinguished
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 applied
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 applied
HORST DIETER SCHIFFER v PAUL PATTISON
V 490 of 1999
KENNY J
10 AUGUST 2001
MELBOURNE
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IN THE FEDERAL COURT OF AUSTRALIA |
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V 490 OF 1999 |
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BETWEEN: |
HORST DIETER SCHIFFER Applicant
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AND: |
PAUL PATTISON Respondent
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DATE OF ORDER: |
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WHERE MADE: |
THE COURT ORDERS THAT:
1. The application be dismissed.
2. The applicant pay the respondent’s costs of the application, including reserved costs.
BY CONSENT THE COURT ORDERS THAT:
1. The applicant pay the respondent’s costs of the motion, notice of which was dated 15 October 1999.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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V490 OF 1999 |
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BETWEEN: |
Applicant
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AND: |
Respondent
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JUDGE: |
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DATE: |
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PLACE: |
REASONS FOR JUDGMENT
1 The applicant, Mr Horst Dieter Schiffer, filed a statement of affairs on 12 July 1995. As a consequence, by virtue of s 149(4) of the Bankruptcy Act 1966 (Cth) (“the Act”), he would, in the ordinary course, have been discharged from bankruptcy on 13 July 1998. On 7 July 1998, however, the respondent, who is Mr Schiffer’s trustee in bankruptcy, filed a notice of objection to his discharge (“the first notice of objection”) pursuant to s 149B(1) of the Act. The first notice of objection had the effect of extending Mr Schiffer’s period of bankruptcy by five years to 13 July 2003.
2 On 28 August 1998, Mr Schiffer made an application to the Administrative Appeals Tribunal (“the Tribunal”) for review of the respondent’s decision to file the first notice of objection. There was a hearing of Mr Schiffer’s review application on 20 July 1999, following which the Tribunal affirmed the decision under review. This is an appeal, pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”), from the decision of the Tribunal made on 20 July 1999, affirming the respondent’s decision to file a notice of objection to Mr Schiffer’s discharge from bankruptcy.
3 By motion, notice of which is dated 15 October 1999, the respondent made an application to strike out the notice of appeal. On 5 April 2000, however, the Court gave Mr Schiffer leave to amend the notice in accordance with the reasons for judgment delivered that day: see Schiffer v Pattison (2000) 177 ALR 754.
legislative framework
(a) Bankruptcy Act 1966 (Cth)
4 Pursuant to s 139W of the Act, a trustee in bankruptcy is required to make periodic assessments of the bankrupt’s income, and of the contribution (if any) that the bankrupt is liable to pay under s 139S in respect of each contribution assessment period. As soon as practicable after the making of an assessment, the trustee must give to the bankrupt “written notice setting out particulars of the assessment”: s 139W(4). Pursuant to s 139U(1), a bankrupt must, “as soon as practicable, and in any event not later than 21 days, after the end of a contribution assessment period”, give to the trustee a statement setting out “all the income that was derived by the bankrupt during that contribution assessment period” and indicating what income, if any, the bankrupt expects to derive during the next contribution assessment period. Pursuant to s 139V, the trustee may require the bankrupt to give further information if the trustee has reasonable grounds to suspect that any of the particulars given pursuant to s 139U are false or misleading, or that any material particulars have been omitted by the bankrupt. Section 139Z deals with the situation where a bankrupt does not provide information about his or her income, or claims not “to be likely to derive, or not to have derived, any income … during a contribution assessment period”. The liability of a bankrupt to pay a contribution in respect of a contribution assessment period arises under ss 139P and 139Q. The contribution is payable at such time as the trustee determines: s 139ZG(1).
5 The Inspector-General may review a decision of a trustee to make an assessment and may ask the bankrupt for further information for the purposes of the review: ss 139ZA and 139ZC. On a review, the Inspector-General has all the powers of the trustee and may either confirm the decision, or set it aside and make a fresh assessment. The Inspector-General is required to notify the bankrupt if he or she reviews a decision, or refuses a request by a bankrupt for a review of a decision: s 139ZE(1). If, within sixty days after the bankrupt’s request for review of the trustee’s decision to make an assessment, the Inspector-General has not given written notice, the Inspector-General “is taken to have reviewed the trustee’s decision and confirmed it under paragraph 139ZD(a)”: s 139ZE(6).
6 Pursuant to s 139ZF, an application may be made to the Tribunal for review of the trustee’s decision to make an assessment, the Inspector-General’s decision on a review, or the Inspector-General’s decision to refuse a request to review.
7 In the ordinary course, a bankrupt is discharged three years from the date on which he or she filed a statement of affairs: s 149(4). Subsection 149B(1) of the Act provides:
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, or the Official Receiver may file such a notice on the Official Receiver’s own initiative.
An objection takes effect on the day on which details of the notice of objection are entered in the National Personal Insolvency Index: s 149G. Section 149A provides:
(1) If an objection to the discharge of a bankrupt has taken effect in accordance with section 149G, then, unless the objection is withdrawn or cancelled, the reference in whichever of subsections 149(2), (3) and (4) applies in relation to the bankrupt to the period of 3 years from the date on which the bankrupt filed his or her statement of affairs is taken to be a reference to the prescribed number of years from the prescribed date.
(2) For the purposes of subsection (1):
(a) the prescribed number of years is:
(i) if the objection was made on a ground, or on grounds that included a ground, referred to in paragraph 149D(1)(a), (b), (c), (d), (e), (f), (g) or (h) – 8 years; or
(ii) in any other case – 5 years; and
(b) the prescribed date is:
(i) if the objection was made on a ground, or on grounds that included a ground, referred to in paragraph 149D(1)(a) or (h) – the date on which the bankrupt returned to Australia; or
(ii) in any other case – the date from which the bankrupt filed his or her statement of affairs.
8 Section 149C sets out the requirements for the form of the notice. Subsection 149C(1) states:
A notice of objection must:
(a) set out the ground or each of the grounds of objection, being a ground or grounds set out in subsection 149D(1) but not being a ground or grounds of a previous objection to the discharge that was cancelled; and
(b) refer to the evidence or other material that, in the opinion of the trustee or Official Receiver, establishes that ground or each of those grounds; and
(c) state the reasons of the trustee or Official Receiver for objecting to the discharge on that ground or those grounds.
9 Section 149D states the grounds that may be relied on in a notice of objection. Subsection 149D(1) relevantly provides:
The grounds of objection that may be set out in a notice of objection are as follows:
…
(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;
(e) the bankrupt failed to disclose any particulars of income or expected income as required by a provision of this Act referred to in subsection 6A(1) or by section 139U;
(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.
10 If a trustee files a notice of objection, the trustee must notify the bankrupt. Paragraph 149F(1)(a) provides:
As soon as practicable after a notice of objection is filed by the trustee or Official Receiver:
(a) the trustee or Official Receiver must give a copy of the notice to the bankrupt together with a notice to the effect that the bankrupt may do either or both of the following:
(i) request the Inspector-General to review the decision of the trustee or Official Receiver to file the notice of objection;
(ii) subject to the Administrative Appeals Tribunal Act 1975, make an application to the Administrative Appeals Tribunal for a review of the decision of the trustee or Official Receiver to file the notice of objection.
11 As s 149F(1)(a) indicates, the Inspector-General may, pursuant to s 149K(1), review a decision of the trustee to file the notice of objection. The Inspector-General must cancel the objection or confirm the decision: ss 149N(1) and (3). Pursuant to s 149Q, an application may also be made to the Tribunal for review of the trustee’s (or the Official Receiver’s) decision to file a notice of objection, the Inspector-General’s decision on review, or the Inspector-General’s decision to refuse a request to review.
(b) Administrative Appeals Tribunal Act 1975 (Cth)
12 Pursuant to s 25(4) of the AAT Act, the Tribunal has power to review any decision in respect of which application is made to it under any enactment. An application to the Tribunal for review of a decision must be in writing: AAT Act, s 29(1). If the terms of the challenged decision were recorded in writing furnished to the applicant, then the application must be lodged with the Tribunal within “the prescribed time”: s 29(1)(d). The prescribed time for these purposes is the period commencing on the day on which the decision is made and ending on the twenty-eighth day after a document setting out the terms of the decision is furnished to the applicant: s 29(2)(a). The Tribunal may extend the time for making an application for review: s 29(7).
13 In addition to providing what is commonly called a s 37 statement (see AAT Act, s 37(1)(a)), the decision-maker must, “within 28 days after receiving notice of the application”, lodge with the Tribunal “every other document … that is … considered by the person to be relevant to the review of the decision by the Tribunal”: see AAT Act, s 37(1)(b). The Tribunal has power to require a person to lodge other documents: s 37(2).
14 Subsection 39(1) of the AAT Act provides:
Subject to sections 35, 36 and 36B, the Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents.
Nothing in this case turns on ss 35, 36 and 36B. Pursuant to s 40(1)(c), the Tribunal may adjourn the proceeding from time to time. Subsection 33(1) of the AAT Act provides:
In a proceeding before the Tribunal:
(a) the procedure of the Tribunal is, subject to this Act and the regulations and to any other enactment, within the discretion of the Tribunal;
(b) the proceeding shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit; and
(c) the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate.
15 For the purpose of reviewing a decision, the Tribunal may exercise all powers and discretions that are conferred by any relevant enactment on the decision-maker. By virtue of s 43(1) of the AAT Act, it is required to make a decision in writing:
(a) affirming the decision under review;
(b) varying the decision under review; or
(c) setting aside the decision under review and:
(i) making a decision in substitution for the decision so set aside; or
(ii) remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.
Generally speaking, the Tribunal must give reasons either orally or in writing for its decision: s 43(2).
16 An appeal to this Court may be brought from a decision of the Tribunal “on a question of law”: s 44(1). The Court is required to “hear and determine the appeal and may make such order as it thinks appropriate by reason of its decision”: s 44(4). Subsection 44(5) provides:
Without limiting by implication the generality of subsection (4), the orders that may be made by the Federal Court of Australia on an appeal include an order affirming or setting aside the decision of the Tribunal and an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the Court.
background facts
17 The respondent, who is Mr P A Pattison of Ernst & Young, was appointed trustee of Mr Schiffer’s bankrupt estate on 17 May 1995, pursuant to s 156A(3) of the Act. On 10 November 1995, the respondent sent Mr Schiffer a “Notice of Assessment of Contributions” for the contribution assessment period 8 December 1994 to 7 December 1995” (“the assessment”). The assessment indicated that Mr Schiffer’s total assessed income for the relevant period was $74,665, on the basis of which he was liable to pay a contribution of $24,583.50 to his estate. The total income amount represented “Salary/Wages deemed reasonable according to the salary and wages of the Industry Group in the same field as Kilsyth Springs Pty Ltd/Condor Manufacturing as deemed pursuant to Section 139Y of the Bankruptcy Act, 1966”. The reference to “Kilsyth Springs Pty Ltd/Condor Manufacturing” was a reference to Mr Schiffer’s business. The respondent relied upon deemed rather than actual income because of the bankrupt’s alleged failure to disclose sufficient information to enable a true assessment of his actual income and assets. The assessment instructed that Mr Schiffer was required to make “full payment on or before 8 December 1995”, and informed him that if he disagreed with the assessment, he could apply to either the Inspector-General or the Tribunal for review.
18 As will be seen, Mr Schiffer did not comply with the assessment. Instead, he applied to the Inspector-General for a review under s 139ZA of the Act. He later failed to respond to the Inspector-General’s request for more information and, so far as appears, nothing further happened on the review.
19 Mr Schiffer has refused to pay the assessment on the basis that he never actually earned the income upon which the assessment is based.
20 Under the heading “Ground”, the first notice of objection, which was dated 7 July 1998, stated:
The ground for my objection is contained in Section 149D(1)(e) that the Act, namely that the bankrupt failed to pay to the trustee an amount that the bankrupt was liable to pay under section 139ZG of the Act.
In addition, the bankrupt failed, to disclose any particulars of income or expected income as required by a provision of this Act referred to in Section 139U. The ground is that contained in Section 149D(1)(f) of the Act.
(The reference to s 149D(1)(e) should have been a reference to s 149D(f), and the reference to s 149D(1)(f) should have been a reference to s 149D(1)(e). Nothing apparently turns upon these mistakes.) Under the heading “Evidence”, the first notice of objection referred to Mr Schiffer’s failure to pay the assessment; to some twelve letters from the respondent to Mr Schiffer during the period 23 February 1996 to 9 June 1998; and to conversations between the respondent’s office and Mr Schiffer.
21 Under the heading “Reasons”, the respondent stated as follows:
My decision to object to the bankrupt’s discharge on the grounds set out in Section 149D(1)(e) and (f) has been made on the basis that in all the circumstances his bankruptcy ought not to be discharged under Section 149. To express a ground of objection, can in some cases, be to also state the reasons. In making my decision, I have considered the severity of his breach of his obligations on my administration of his estate and the reduction in amount payable to creditors. I have decided that his failure to provide me with his income information and his failure to pay the estate the income outstanding justifies my objection to his discharge because: -
(a) It has required me to incur additional costs in attempting to assess the true value of his income and to recover the outstanding contributions from the bankrupt;
(b) I have spent considerable time corresponding with the bankrupt regarding information about his income;
(c) The actions of the bankrupt have been detrimental to creditors in that he did not make all of his income information available to me. As a result of his actions, I have not been able to assess the bankrupt’s compulsory contributions for the contribution assessment periods 8 December 1995 to 7 December 1996 and 8 December 1996 to 7 December 1997 and the amount which would be otherwise available to the creditors of the estate by way of dividend distribution.
(d) I am not satisfied that the bankrupt has disclosed all his assets to me and believe that he may have other assets to which I am entitled, particularly his involvement with his associated entities.
(e) I have spent several hours preparing a notice of objection to discharge which would not have been necessary to prepare had the bankrupt conformed with his obligations under the Act to provide me with information about income and hence provided me with sufficient information to assess his income.
(f) I require further time to complete my investigations especially in relation to issuing a notice of income contributions for the contribution period 8 December 1995 to date and also in relation to any other assets that may not have been disclosed.
(g) The continuation of his bankruptcy will enable me to identify and realise for the benefits of the creditors, the bankrupt’s property and enable to recoup additional expenditure from income contributions which he was required to make and from income contributions which he may [be] required to make from 8 December 1995 to date (which I am unable to assess for lack of response from the bankrupt) and during his extended bankruptcy.
22 The first notice of objection further stated:
This objection has the effect of extending the bankruptcy to the 13th day of July 2003.
It also contained the statements required by s 149F of the Act.
23 In his application lodged in the Tribunal on 28 August 1998, Mr Schiffer referred to the fact that the decision was made on 10 July 1998 and stated that his reasons for seeking review were:
Seems to me unrealistic and of him being unreasonable in his expectation.
By consent, the Tribunal granted an extension of time to lodge the application.
24 Under cover of letter dated 24 September 1998, the respondent subsequently notified Mr Schiffer that he had filed another notice of objection to discharge dated 3 September 1998 (“the second notice of objection”). The second notice of objection stated:
The ground for my objection is contained in Section 149D(1)(n) of the Act, namely that the bankrupt failed, whether intentionally or not, to disclose to the trustee the bankrupt’s beneficial interest in any property.
25 The second notice of objection referred to information that Mr Schiffer had sold shares in AMP Limited (“AMP”) for $39,429.49. It stated that Mr Schiffer had failed to disclose his interest in the shares, or to respond to a letter dated 20 August 1998 from the respondent requesting the return of the money to the estate. After giving the respondent’s reasons for filing the second notice of objection, the second notice of objection stated:
This objection has the effect of extending the bankruptcy to the 13th day of July 2000.
proceedings before the tribunal
26 At the time of the hearing of Mr Schiffer’s review application on 20 July 1999, the documents before the Tribunal (described as the “T” documents) included the following:
(1) Mr Schiffer’s application for review.
(2) The first notice of objection.
(3) Mr Schiffer’s statement of affairs, disclosing liabilities of $12,440,350 and assets of $26,120.
(4) The assessment (dated 10 November 1995).
(5) Ernst & Young file note of a telephone conversation dated 10 November 1995, recording that Mr Schiffer said:
[O]ur assessment was nonsense. He will apply to have the assessment reviewed.
I told him that he was able to do that and should apply to the OR [Official Receiver] if he wanted to follow that course.
(6) Letter dated 23 February 1996 from the respondent to Mr Schiffer requesting the information identified in a form of annual statement of income for the period 8 December 1995 to 7 December 1996, and stating that:
If you do not return the form I may lodge an objection to your discharge from bankruptcy. This would mean that you would be bankrupt for an extra five years.
(7) Letter dated 10 April 1996 from the respondent to Mr Schiffer informing him that he was liable to pay his estate $24,583.50, requesting payment by 26 April 1996, and informing him that:
If I do not receive your contribution by this date I will lodge an objection to your discharge which will extend your bankruptcy to 13 July 2003.
(8) Ernst & Young file note dated 19 April 1996 recording that Mr Schiffer asked “what the consequences of not paying his assessment [were] or if he does not ask for a review”.
(9) Letter dated 23 April 1996 from the respondent to Mr Schiffer reiterating the respondent’s request for a completed annual statement of income for the period 8 December 1995 to 7 December 1996.
(10) Letter dated 24 April 1996 from the respondent to Mr Schiffer requesting payment of the assessment and referring to the respondent’s power to “extend your bankruptcy to eight years from the date you filed your statement of affairs with the Registrar in Bankruptcy”.
(11) Letter dated 24 May 1996 from the respondent to Mr Schiffer reiterating the respondent’s request for a completed annual statement of income, payment of the assessment, and warning of the risk that his bankruptcy would be extended by eight years if he failed to make this payment.
(12) Annual statement of income for the period 8 December 1995 to 7 December 1996, completed and signed by Mr Schiffer and dated 30 May 1996.
(13) Letter dated 31 May 1996 from the respondent to Mr Schiffer seeking further information concerning his employment.
(14) Letter dated 3 June 1996 from the respondent to Mr Schiffer seeking certain information about motor vehicles in his possession.
(15) Letter dated 5 July 1996 from the respondent to Mr Schiffer seeking a response to the letter of 31 May 1996. The letter further stated:
I understand from your answers to the income questionnaire that you wish to appeal the income assessment dated 10 November 1995 in the sum of $24,583.50. I suggest that you apply to the Inspector General to have the assessment reviewed. This can be done by writing to the Official Receiver and attaching a copy of the assessment and any documents you rely on to support your view. Alternatively you can file your appeal with the Administrative Appeals Tribunal.
In the meantime, you are still liable to make a contribution to your estate in respect of this amount. I request that you provide me with your cheque in the sum of $24,583.50 by 30 July 1996.
(16) Letter dated 30 May 1997 from the respondent to Mr Schiffer asking him to complete an annual statement of income for the period 8 December 1996 to 7 December 1997 and to provide the information sought in the letter dated 31 May 1996. The letter advised “[i]f you do not return the form I may lodge an objection to your discharge from bankruptcy. This would mean that you would be bankrupt for an extra five years”. It also referred to the fact the assessment remained unpaid.
(17) Letter dated 18 November 1997 from the respondent to Mr Schiffer enclosing the respondent’s letter of 30 May 1997 and requesting that Mr Schiffer complete and return the form, answer the questions raised in the respondent’s letter of 31 May 1996, and pay the assessment. The letter again warned that the respondent would have a ground to lodge a notice of objection to Mr Schiffer’s discharge if he did not complete the annual statement of income.
(18) Letter dated 17 February 1998 from the respondent to Mr Schiffer referring to the respondent’s letters of 18 November 1997, 30 May 1997 and 31 May 1996 and requesting responses and payment of the assessment. The letter further stated:
I will lodge an Objection to your discharge immediately, which will have the effect of extending your bankruptcy to 13 July 2003.
(19) Letter dated 9 June 1998 from the respondent to Mr Schiffer referring to the respondent’s letters of 17 February 1998, 18 November 1997, 30 May 1997 and 31 May 1996 requiring payment of the assessment and reiterating that the respondent would lodge a notice of objection.
27 Mr Schiffer was unrepresented at the hearing before the Tribunal (constituted by Deputy President Forrest, Mr Elsum and Mr McLean) on 20 July 1999. The respondent had legal representation. Mr Schiffer gave evidence under oath and was cross-examined by the respondent’s representative. During the course of the hearing, the respondent tendered a letter dated 19 August 1998 from AMP to him and a letter dated 27 April 1999 from the respondent to Mr Schiffer. These letters concerned the AMP shares that Mr Schiffer allegedly sold between 10 and 20 July 1998 for the sum of $39,429.49.
28 At the commencement of the hearing, the Deputy President referred to the decision under review and the procedure to be followed by the Tribunal. The Deputy President stated:
Mr Schiffer, … you are seeking review of a decision of your trustee in bankruptcy to file an objection to your discharge from bankruptcy. That decision was made on 7 July last year and it was made on two grounds in section 149D of the Bankruptcy Act, one being that – one of those grounds relied on was that you had – under 149D(1)(e) that you had failed to disclose any particulars of income or expected income as required by a provision of the Act, and the other ground (f) was that it was alleged that you had failed to pay to the trustee an amount that you were liable to pay under section 139ZG which is in relation to an assessment, contribution assessment, which had been made by the trustee in relation to your estate.
Now, you are probably aware that the effect of that objection is that, if sustained, it extends the period of bankruptcy from three to a total of eight years … . This Tribunal has jurisdiction to review a decision to file a notice of objection to the discharge, and what we will do now is hear what you have to say in relation to this review, you are seeking a review of that decision to file the objection to discharge, and you have an opportunity now to give evidence in relation to that.
…
[Y]ou can either make a short statement now if you like or we can go straight into your evidence.
29 The Deputy President added:
[A]s you are acting on your own account, if you have any queries from time to time we will endeavour to answer those in regard to any procedures. What will happen is that you will give your evidence as to why the decision should be set aside, the decision to object to your discharge.
30 After Mr Schiffer was sworn, the Deputy President referred to the two grounds of objection in the respondent’s first notice of objection (noting the mistakes mentioned above) and the documents before the Tribunal. The Deputy President then asked Mr Schiffer about the assessment. In response to the question “What do you say in regard to that assessment?”, Mr Schiffer said:
Well, what I say to that is basically I never earned the money; you know, it’s absolute nonsense. I told them that at the time when I got the notice in the first place, and that was the end of it. I mean, you haven’t got the money, you just can’t pay it.
This led the Deputy President to ask, “when that assessment was made back in 1995 and there were also some subsequent assessments made in the following years, did you ever seek to have those reviewed, those assessments?”. Mr Schiffer replied:
Well, I sent – they told me that I should send some letters to [ITSA] or to some other place, actually to this place here. And I sent a letter to [ITSA] and then they said, well, you have got to put so much more extra stuff in it and I just didn’t do it because I told them it’s all nonsense.
31 The Deputy President also asked Mr Schiffer about other contribution notices; his employment since 1995; and the income earned by the family business. At the end of this line of questions, Mr Schiffer was asked whether he had anything to add. He said:
Well, we don’t earn the money. We never earned that much money. I mean, I would be lucky if I would have. It would have been much easier because even then at that time the $24,000 wouldn’t be much money to pay and we haven’t been – it hasn’t worked out so far with us that we earned the money. If I would have, I would be easily happy to pay it, but as in ’95 I didn’t earn it and I don’t earn it now. That’s the plain fact of it.
32 Immediately after this statement of Mr Schiffer, the respondent’s representative was given an opportunity to cross-examine him. The respondent’s representative and the Tribunal members asked Mr Schiffer questions about his borrowings; his involvement in the family business; the AMP shares; and his action in relation to the assessment.
33 There was an exchange, in the following terms, between the respondent’s representative and Mr Schiffer about the AMP shares:
[respondent]: The trustee has written to you subsequent to this objection in relation to some AMP shares. Now, these documents ---- ? --- The AMP shares ----
--- are not part ---
The D. President: Just wait for the question, Mr Schiffer.
[respondent]: These documents are not part of the T documents but I have some copies here. In relation to you saying that you have no ability to make a payment and no money, what do you say in relation to the sale of these AMP shares?
[mr schiffer]: They’re – they were simply my wife’s. Even so – because that insurance policy was made out in 1980 and at that time we were not really well ….
The D. President: I am sorry, would you repeat that?
[mr schiffer]: We were not really well … You know, we didn’t have – there was enough money – there was always a problem that things could go wrong, so I took out the insurance and I paid it for so many years – actually, not I paid it, the company paid it out of my wife’s drawings and then – this insurance, I didn’t even know that I had it because it paid itself all the time, you know, there was enough always in there so that it paid for itself and at the moment there’s about $18,000 owing on premiums and interest on it and as it happened, we got the shares. And it was clear in my mind that and in my wife’s mind, because this it – this insurance is a debt cover, and was for the benefit of my wife and she paid the premiums initially on it. Even so, afterwards - -
mr mclean: I thought you said the company paid the premiums?
[mr schiffer]: Yes, the company paid it but it was out of her drawings. In other words, we told the girls at work to pay the insurance policy. It was eventually automatically paid, and that’s what she paid.
…
[mr mclean]: So you were the insured.
The D. President: Is that material that you have there that is not in the T document - -
[respondent]: Yes.
The respondent’s representative subsequently tendered the letters regarding the AMP shares (referred to above).
34 When Mr Schiffer was asked what had happened to the proceeds of sale, he said:
I don’t know. I can’t remember exactly.
According to Mr Schiffer, his wife had used the money to repay a loan. When Mr Schiffer was asked to identify the person to whom the money had been paid, he said:
I’m not telling. …
35 After this exchange, the respondent’s representative questioned Mr Schiffer about his failure to respond to the respondent’s requests for information, taking him to the letters of 31 May 1996, 3 June 1996, 30 May 1997, 18 November 1997, 17 February 1998 and 9 June 1998 mentioned above. During the questioning, the respondent’s representative again referred to the assessment, as well as to claims in Mr Schiffer’s statement of affairs concerning unsecured creditors.
36 When the respondent’s representative concluded her questions, a Tribunal member commenced to ask Mr Schiffer questions concerning the ownership and operation of certain companies, and Mr Schiffer’s involvement in and drawings from those companies. At the conclusion of these questions, Mr Schiffer withdrew as a witness. In response to an inquiry from the Tribunal, he said that there was no other person he intended to call. The respondent’s representative stated that she did not intend to call any witnesses.
37 In closing submissions, the respondent’s representative said:
In relation to the application, it is my submission that the Tribunal is bound to review the decision under review which is the lodging to the objection to discharge on the basis as specified, which is [s 149D(1)(e) and (f)]. Now, there has been – the evidence of the applicant went down the road, if you like, of the income contribution assessment. It would be my submission that it is not appropriate for the purposes of this review that it be treated as though this is a review of the income contribution assessment, because they are two separate issues.
38 She continued:
[T]he T documents provide evidence of many requests being made by the trustee in relation to the payment of that sum of money. It is also relevant to consider that when the AMP share dividend came through the applicant did, in fact, have an amount that was greater than the income contribution assessment at that stage and chose not to pay that money to his trustee, notwithstanding the fact that he had many letters from the trustee in relation to that.
The respondent’s representative submitted that it was clear from Mr Schiffer’s evidence that he had not paid and had no intention of paying the assessment, and that the documents before the Tribunal showed that he had failed to provide the information requested by the respondent. She said:
[I]t would be my submission that the decision of the trustee to lodge the objection to discharge on the basis that he set out in his notice was a perfectly acceptable decision to make, and that the evidence presented to the Tribunal supports the decision that the trustee made in lodging such an objection. The estate, the amount of creditors is large and it appears from the material that it has been difficult for the trustee to obtain fairly basic information that he requires as a trustee to fulfil his obligation to those creditors, such information as the income or assets of the applicant, and the trustee is entitled to assess a contribution which goes towards the creditors again.
So it would be my submission that the applicant has not provided any fresh evidence or new evidence to the Tribunal today that would support the Tribunal making a decision other than the trustee did, based on the evidence.
39 In response to the Deputy President’s question as to whether he had anything to say in conclusion, Mr Schiffer repeated that he “did not earn the money” and that he had “told them so”.
40 The Tribunal delivered its judgment orally at the end of the hearing. The judgment read, in full, as follows:
The overriding impression that has been given to us in this matter is the obvious antipathy of the applicant, Mr Schiffer towards his trustee Mr Pattison. Mr Schiffer has taken a particular view of the trustee. It is abundantly clear from Mr Schiffer’s evidence that he has no intention of making any payments towards the contribution assessment or of co-operating with his trustee generally. Objective evidence of this intention is to be found in the material lodged with the Tribunal. In addition Mr Schiffer’s responses to questions asked of him further illustrate the point that he does not intend to make payment of the income contribution, nor respond to requests for information by the trustee in relation to his income and property. Additionally the evidence also revealed Mr Schiffer has failed to disclose his interest in the AMP shareholding or adequately explain what happened to the proceeds of the sale of these shares.
In the result there is no satisfactory evidence before this Tribunal which would lead us to interfere with the decision under review. There are certain consequences which do flow from the position which you have taken Mr Schiffer and unfortunately for you is that you leave the Tribunal with no option other than to affirm the decision under review. The consequences of that of course is that your period of bankruptcy will continue until 13 July 2003 as the notice of objection indicates. The Tribunal will now adjourn.
grounds
41 In his amended notice of appeal, Mr Schiffer propounded the following questions of law:
(a) that the Tribunal did not afford him procedural fairness in the hearing and determination of his review application;
(b) that the Tribunal gave erroneous consideration to irrelevant material;
(c) that the Tribunal lacked jurisdiction to hear and determine the substantive issues the subject of the second notice of objection with respect to the AMP shares; and
(d) that the Tribunal erred in failing to discharge its statutory task in respect of determining the adequacy at law and on the evidence of the first notice of objection.
42 I have set out the background facts and circumstances in detail because these matters can only be properly considered in light of the overall proceedings before the Tribunal.
procedural fairness
43 At the hearing, counsel for Mr Schiffer made submissions in accordance with the grounds stated in the amended notice of appeal. They relevantly were that the Tribunal erred in failing:
(a) to identify to the Applicant, as a litigant in person, adequately and unambiguously the decision that was under review;
(b) to raise squarely for the Applicant issues regarding the reviewability of the contribution assessment;
(c) to suggest to the Applicant that he might seek an adjournment of the hearing of his application for review in light of the introduction of evidence in respect of the AMP shares which had not been included in the ‘T’ documents.
(a) Identifying the decision under review
44 Counsel for Mr Schiffer invited the court to infer that Mr Schiffer was confused about the decision under review. Counsel contended that this inference should be drawn from Mr Schiffer’s review application, his original notice of appeal, and what happened at the hearing, as recorded in the transcript.
45 By describing, in his review application filed in the Tribunal on 28 August 1998, the decision made on 10 July 1998 as the decision to be reviewed, Mr Schiffer plainly identified the respondent’s decision to file the first notice of objection. The review application does not evidence any confusion. In his extension of time application, Mr Schiffer identified the decision to be reviewed as “[Mr Pattison’s] objection to my discharge of bankruptcy” dated 10 July 1998. In his original notice of appeal, Mr Schiffer said that the question of law to be raised on the appeal was “the ground on which the Trustee in Bankruptcy based his objection to discharge the Bankrupt … was not valid …”. There was no relevant confusion shown here. Further, as the preceding account of the hearing before the Tribunal makes plain, at the outset of the hearing, the Tribunal specifically informed Mr Schiffer that the decision under review was his trustee’s decision to file the first notice of objection. The trustee’s representative reiterated this in closing submissions.
46 Counsel for Mr Schiffer contended that, in the hearing, Mr Schiffer focussed on what he alleged to be the mistaken basis of the assessment. Counsel contended that this evidenced confusion on Mr Schiffer’s part as to the decision under review. Bearing in mind what I have already said, I reject this contention. In any event, the assessment was relevant to the decision under review. In making his decision, the respondent relied on Mr Schiffer’s non payment of the assessment in connection with the ground identified in s 149D(1)(f) of the Act. Mr Schiffer’s response to the assessment was also relevant to the respondent’s reasons for the decision. Mr Schiffer focussed upon the alleged erroneous basis of the assessment because that was the way in which he chose to meet the respondent’s case. I do not, however, infer from this that Mr Schiffer was mistaken as to the decision under review.
(b) Reviewing the assessment
47 Counsel for Mr Schiffer submitted that, since the Tribunal permitted Mr Schiffer to challenge the assessment in the manner described, then “the Tribunal had a duty to raise squarely for him the need to have that decision reviewed”. Counsel contended that the problem had been compounded by the Tribunal’s line of questions about Mr Schiffer’s income because this matter was, so counsel submitted, only relevant to the assessment. I reject this submission. These questions were relevant to the respondent’s reasons for the decision under review (such as whether further investigation would be for the benefit of creditors and whether the bankrupt was failing to make proper disclosure).
48 As already noted, the material in the documents before the Tribunal made it plain enough that the respondent had informed Mr Schiffer that he had separate rights of review in respect of the assessment and the first notice of objection. Mr Schiffer had, moreover, conceded that he had already invoked review rights in respect of the assessment, although he had not pursued them.
49 In the circumstances of the case, the Tribunal did not fail in any duty to inform Mr Schiffer about his review rights. (It is unnecessary to deal with a further contention that it would have been open to the Tribunal to have granted an extension of time pursuant to s 29(7) of the AAT Act, to enable it to review the decision to issue the assessment.)
(c) Availability of an adjournment?
50 Counsel for Mr Schiffer submitted that the Tribunal had denied Mr Schiffer procedural fairness by failing to inform him that he might seek an adjournment “to better prepare his Application upon the AMP shares issue”.
51 The AMP shares issue was relevant to Mr Schiffer’s credibility. The letters tendered by the respondent’s representative and accepted by the Tribunal indicated that Mr Schiffer had received some $39,000, in consequence of a share sale, that he had not disclosed to his trustee. The AMP shares issue was relevant to the respondent’s claim, included in the statement of his reasons for his decision, that Mr Schiffer had failed to disclose information about his assets, and that the respondent needed further time to complete his investigations, for the ultimate benefit of Mr Schiffer’s creditors.
52 Counsel for Mr Schiffer referred to the fact that the letters tendered on the respondent’s behalf at the hearing were not included in the documents that the trustee provided to the Tribunal in discharging obligations under s 37(1)(b) of the AAT Act. Section s 37(1)(b) of the AAT Act requires the decision-maker to lodge with the Tribunal every document in his possession that he considers relevant to the review of the decision by the Tribunal “within 28 days after receiving notice of the application (or within such further period as the Tribunal allows)”. Under this provision, the documents that must be lodged are those that the decision-maker considers relevant when he or she comes to lodge them. There are two matters to note: first, the obligation imposed by s 37(1)(b) is not an on-going one for the course of the Tribunal proceeding and, secondly, the discharge of the obligation depends on the opinion of the decision-maker concerning the relevance of documents to the Tribunal’s review. This does not mean that the decision-maker is free to form an opinion in any way he pleases. He or she must act conscientiously, and in accordance with law: cf Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 (“Wu Shan Liang”) at 275-276. Further, this does not mean that a decision-maker need not disclose to the Tribunal information that he or she subsequently considers relevant to the Tribunal’s review: see, e.g., [79] below. It may be recalled that the decision under review was made on 7 July 1998, and that Mr Schiffer lodged his review application on 28 August 1998. The court file, which includes documents forwarded by the Tribunal pursuant to s 46(1)(a) of the AAT Act, does not disclose precisely when the respondent first lodged the T documents with the Tribunal. The AMP wrote to the respondent on 19 August 1998 about the sale of shares allegedly belonging to Mr Schiffer. The respondent wrote to Mr Schiffer about the matter on 20 August 1998 and, when Mr Schiffer did not respond, again on 27 April 1999. The respondent did not have any documents in his possession relating to the share sales at the time he filed the first notice of objection and, in consequence, he may properly have considered that they were neither relevant to his decision nor to the Tribunal’s review of it. His legal representative took the view (which I accept) that two letters relating to the share sales issue were relevant to the Tribunal’s decision, but this does not mean that the respondent breached his obligation under s 37(1)(b) of the AAT Act. I therefore reject the submission made by counsel for Mr Schiffer. The Tribunal had, moreover, made no direction in terms of s 37(2) of the AAT Act.
53 As already noted, the AMP shares issue was the basis for the second notice of objection, filed on 3 September 1998. Although the decision concerning the second notice of objection was not before the Tribunal, this does not mean that matters pertinent to it were not also pertinent to the first notice of objection. Moreover, even if Mr Schiffer had not anticipated that the AMP shares issue would arise at the hearing before the Tribunal in July 1999 (and there is no evidence of this), his trustee’s concerns about the issue were not new to him. These concerns had been conveyed to him in mid 1999 by the respondent’s letters of 20 August 1998 and 27 April 1999 and formed the basis of the second notice of objection that was sent to him under cover of a letter dated 24 September 1998.
54 Counsel for Mr Schiffer submitted that, in the absence of an adjournment, Mr Schiffer had not been given an opportunity to adduce “oral or documentary evidence in corroboration of his evidence” that the shares were beneficially owned by his wife and not by him. I reject the submission that this constituted a breach of the rules of procedural fairness.
55 In connection with the procedural fairness issue, both parties referred to Sullivan v Department of Transport (1978) 20 ALR 323 (“Sullivan”), which concerned, in part, the duties of the Tribunal in hearing an unrepresented applicant’s challenge to a decision refusing him a commercial pilot’s licence on medical grounds. In the course of the Tribunal’s hearing, the review applicant indicated that he wished to question a medical practitioner who was not present. He also failed to refer to the possibility that he might be granted a conditional licence.
56 The parties relied on observations of Deane J (with whom Fisher J agreed). His Honour said at 342-343:
Section 39 of the Administrative Appeals Tribunal Act provides, for present purposes, that ‘the Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his case’. In dealing with an application for review, the Tribunal is plainly under a duty to act judicially, that is to say, with judicial fairness and detachment. In these circumstances, the requirement contained in s 39 that the Tribunal shall ensure that a party to the proceedings before it be given a reasonable opportunity to present his case constitutes statutory recognition of an obligation which the law would, in any event, imply. Where a Tribunal is under a duty to act judicially, the principle that a party must be given a reasonable opportunity to present his case is at the heart of the requirements of natural justice which it is obliged to observe … . If, in all the circumstances, the failure of the Tribunal to adjourn the matter to enable Dr Evans to be called as a witness or to alert the appellant of his right to apply for such an adjournment constituted a denial to the appellant of a reasonable opportunity of presenting his case, both the common law principles applicable to a tribunal under a duty to act judicially and the specific provisions of s 39 of the Act entitle the appellant to the intervention of this court.
… In the ordinary case, a tribunal which is under a duty to act judicially and which has the relevant parties before it will be best advised to be guided by the parties in identifying the issues and to permit the parties to present their respective cases in the manner which they think appropriate. Circumstances may, of course, arise in which such a statutory tribunal, in the proper performance of its functions, will be obliged to raise issues which the parties do not wish to dispute and to interfere, either by giving guidance or by adverse ruling, with the manner in which a particular party wishes to present his case. Ordinarily, however, in the absence of a request for assistance or guidance by a party who is appearing in person, a tribunal under a duty to act judicially should be conscious of the fact that undue interference in the manner in which a party conducts his case may, no matter how well intentioned, be counter-productive and, indeed, even overawe and distract a party appearing in person to the extent that it leads to a failure to extend to him an adequate opportunity of presenting his case.
A refusal to grant an adjournment can constitute a failure to give a party to proceedings the opportunity of adequately presenting his case. If the Tribunal had, in the present matter, refused an application by the appellant for an adjournment to enable him to procure Dr Evans’ attendance as a witness, that refusal may well have constituted such a failure. No such application for an adjournment was, however, made. If it had been made, it is highly probable that the Tribunal would have acceded to it: indeed, counsel who appeared for the appellant stated that he did not dispute that, if the appellant had applied for an adjournment, the Tribunal would have granted it. The absence of any application for an adjournment does not, however, necessarily conclude the issue adversely to the appellant. The failure of a tribunal which is under a duty to act judicially to adjourn a matter may, conceivably, constitute a failure to allow a party the opportunity of properly presenting his case even though the party in question has not expressly sought an adjournment … . In this regard, however, it is important to remember that the relevant duty of the Tribunal is to ensure that a party is given a reasonable opportunity to present his case. Neither the Act nor the common law imposes upon the Tribunal the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled.
57 In Sullivan, the applicant before the Tribunal indicated that he wished to call Dr Evans as a witness but he gave no indication that he thought it appropriate that the proceedings be adjourned to permit Dr Evans to be called. Deane J rejected the suggestion that he “may have been under a misapprehension as to the ability of the Tribunal to procure Dr Evans’ attendance or as to his right to seek an adjournment”. His Honour observed that there was “nothing to indicate that that was the case”. His Honour concluded at 343-344:
In the context of the express invitation to the appellant, at the conclusion of the evidence, to adduce any further evidence or other material and of the complete absence of any indication by the appellant that he was under any misapprehension or that he desired that the proceedings be adjourned, the failure of the Tribunal either to adjourn the proceedings of its own motion or expressly to inform the appellant of his right to seek an adjournment did not, in my view, constitute a failure to ensure that the appellant was given a reasonable opportunity of putting his case or otherwise involve a failure to observe the requirements of natural justice.
58 In Titan v Babic (1994) 49 FCR 546, the Full Court of this Court (Northrop, Neaves, Ryan, French and O’Loughlin JJ) affirmed a similar principle. The Court observed at 554-555:
Where it is apparent that a party who does not have legal representation has misunderstood procedural requirements so that he or she is not in a position to complete the presentation of evidence, an adjournment might be considered in the interests of justice provided that no irreparable substantive or procedural injustice is done to the other party involved. In any such case the granting of an adjournment will be a matter of discretion. In this case there was no application for an adjournment nor does there seem to have been any intelligible explanation to the Master of Mr Titan’s failure to arrange his witnesses. It may be that in some cases a tribunal should, to avoid possible injustice, inquire of an unrepresented person the reason for the failure properly to prepare his or her case. Again, that is a matter of discretion limited by the necessity that the tribunal be, and appear to be, impartial as between the parties.
The Full Court determined in Titan v Babic that there was no error on the part of the Master who, at a hearing for the assessment of damages in a personal injury action, had not granted an adjournment or inquired further since the plaintiff’s misunderstanding that he was precluded from calling further witnesses was not apparent from anything said by the plaintiff to the Master. The plaintiff’s failure flowed from his own misunderstanding of what he could do at the hearing.
59 In the present case, the Tribunal gave Mr Schiffer a reasonable opportunity to present his case. At the outset, as already noted, the Tribunal invited him to raise any queries he might have regarding procedure to be followed. Later on, after hearing Mr Schiffer’s evidence, the Tribunal specifically asked him whether he intended to call any other witnesses and, towards the conclusion of the hearing, the Deputy President gave him an opportunity to say what he wished in conclusion. Mr Schiffer declined the opportunity to call further witnesses. He did not question the Tribunal’s procedures, and he did not ask for any adjournment of the proceeding. His counsel did not suggest that he misunderstood the Tribunal’s procedural requirements, and there was nothing that would have led the Tribunal to doubt his comprehension. There is nothing in the conduct of the hearing before the Tribunal that supports the proposition that Mr Schiffer could not have asked for an adjournment had he wanted one. There is nothing that would indicate that the Tribunal would not have given proper consideration to any such application.
irrelevant considerations
60 In his amended notice of appeal, Mr Schiffer maintained:
The Tribunal erred in considering irrelevant material with respect to the AMP shares in light of that material being the subject of a second Notice of Objection, the existence of which the Tribunal was not informed.
61 In Inspector-General v Nelson (1998) 86 FCR 67 at 78 (“Nelson”), the Full Court of this Court observed:
In providing that the trustee ‘may file’ a written notice of objection to discharge, s 149B(1) uses language by which discretions are commonly conferred.
…
There is no reason to be found in these provisions for thinking that the considerations relevant to the exercise of the discretion to file a notice of objection are any less extensive than all those conformable to the purpose and objects of the Act.
See also Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40 per Mason J.
62 For the reasons already stated, I reject the submission that the AMP shares issue was irrelevant to the decision that the Tribunal was required to make, namely, whether to affirm, vary, or set aside the respondent’s decision to file the first notice of objection. The fact that the AMP shares issue was relevant to the respondent’s decision to file the second notice of objection did not render the matter irrelevant to the Tribunal’s decision. It is immaterial that the AMP shares issue might, as Mr Schiffer submitted, constitute a ground under s 149D(1)(n). Moreover, in making its decision, the Tribunal was entitled to take into account evidence that was not relied on by the respondent at the time he made the decision under review: see, e.g., Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589; Fitz-Gibbon v Inspector-General in Bankruptcy [2000] FCA 1677 at [35] per Stone J and Re Woodman & Inspector-General in Bankruptcy (1996) 22 AAR 508 at 524.
jurisdiction
63 In his amended notice of appeal, Mr Schiffer maintained:
The Tribunal erred in effectively hearing and determining the substantive issues of the Second Notice of Objection which was not the subject of any application for review, nor the subject of any material included in the “T” documents.
64 I reject this submission. The record does not support Mr Schiffer’s allegation that the Tribunal heard and determined the merits of the respondent’s decision to file the second notice of objection. There is nothing in the material that would enable it properly to be said that the Tribunal was invited to proceed, and did proceed, on the basis that the respondent’s decision to issue the second notice of objection was before it.
65 As Mr Schiffer’s counsel noted, the Tribunal was not informed of the second notice of objection (purporting to extend his bankruptcy to 13 July 2000 instead of to 13 July 2003 as did the first notice of objection). Circumstances may arise in which a trustee’s decision to file another notice of objection would be pertinent to the Tribunal’s review of an earlier notice of objection. It would have been preferable if the respondent’s representative had informed the Tribunal of the filing of the second notice of objection. In the circumstances of this case, however, the filing of the second notice of objection had little or no bearing on the Tribunal’s review of the respondent’s decision to file the first notice of objection, and nothing turns on the failure of the respondent’s representative to inform the Tribunal of the second notice of objection.
66 Although Mr Schiffer also made submissions on the effect of the second notice of objection, it is unnecessary to consider these further.
failure to discharge the statutory task
67 On this topic, the submissions of counsel for Mr Schiffer departed from the terms of the amended notice of appeal which relevantly read:
The Tribunal erred in failing to determine whether the First Notice of Objection satisfied the requirements of section 149C of the Act;
The Tribunal erred in failing to satisfy itself that the grounds relied upon by the Trustee were made out on the evidence and thereby failing to properly exercise its discretion to affirm the objection to discharge of the bankrupt.
I first deal with these two matters, and then with counsel’s additional submissions.
68 The respondent set out his reasons for filing the first notice of objection in some detail. Mr Schiffer did not contend at the hearing before the Tribunal that the notice failed to satisfy s 149C(1)(c) of the Act, which, on its face, it did so satisfy: contrast Re Hall (1994) 14 ACSR 488 at 493 and Re Ansett; Ex parte Ansett v Pattison (1995) 56 FCR 526 at 530-1. The Tribunal was not required to make an express finding that the notice complied with the requirements of this provision. The failure to make such a finding does not permit an inference to be drawn in the circumstances of this case that the Tribunal did not consider s 149C(1)(c) to the extent that the law required it to do.
69 I also reject the submission that the Tribunal erred because it did not satisfy itself that the grounds relied on by the respondent were made out on the evidence before it. In its reasons, the Tribunal found that Mr Schiffer had “no intention of making any payments towards the … assessment”. It implicitly accepted that Mr Schiffer had not paid an amount that he was liable to pay under s 139ZG of the Act, as the respondent maintained. Indeed, on the material before it, any other finding would have been perverse. The ground referred to in s 149D(1)(f) of the Act was therefore established. The Tribunal also found that Mr Schiffer “did not intend … to respond to requests for information … in relation to his income and property”. The Tribunal implicitly accepted that Mr Schiffer had not disclosed information about his income as required by s 139U of the Act. The ground referred to in s 149D(1)(e) was thus established. Further, if it matters, the Tribunal also implicitly accepted that he had not disclosed information about his property, this being the ground referred to in s 149D(1)(d).
70 At the hearing in this court, counsel for Mr Schiffer contended that the Tribunal had failed to consider the cogency of the reasons advanced by the respondent for the decision under review. In written submission, he contended that:
No evidence was adduced from the Respondent trustee as to his reasons nor were any such reasons the subject of cross-examination of Mr Schiffer.
Counsel for Mr Schiffer relied on the decision of the Full Court in Nelson to support his argument that, for this reason, there was an error of law in the Tribunal’s decision.
71 In that case, the Full Court held that a bankrupt is entitled to the benefit of a discharge by operation of law unless the trustee has reasons directed to achievement of a purpose of the law of bankruptcy that justify extending the bankruptcy beyond the ordinary period. The Full Court stated, at 78:
The policy of the current bankruptcy legislation is that, prima facie, a bankrupt is entitled to the benefit of a discharge by operation of law. The sections dealing with objections to discharge are consistent with this policy. By requiring that a notice of objection must not only set out the ground or grounds of objection and refer to the evidentiary material relied upon in support, but also state the ‘reasons’ for objecting, s 149C makes it clear that a trustee filing such a notice must have reasons for doing so, in addition to being satisfied that the evidentiary material establishes one or more permissible grounds. By providing for review by the Inspector-General of the decision to object, s 149K makes it clear that the reasons for objecting were intended to be subject to scrutiny. Finally, by providing for review by the [Tribunal] of, inter alia, a decision to file a notice of objection and the Inspector-General’s decision on review of such a decision, s 149Q again makes it clear that the reasons for the filing of a notice of objection are to be the subject of scrutiny.
After referring to amendments to bankruptcy legislation, the Court observed, at 79:
We do not think, however, that this change signifies a legislative intention that considerations of purpose, utility, and relevance to the bankruptcy context, were no longer to be relevant to a trustee’s decision whether to object.
72 It may be noted that the Full Court was specifically concerned with the primary decision of the trustee to file an objection notice, although it also mentioned the decision that, on a review, the Inspector-General was called upon to make. It did not refer to the function of the Tribunal, although its comments are relevant to that function. In assessing counsel’s submissions at this point, it is necessary strictly to bear in mind the function of the Tribunal in reviewing the respondent’s decision. This function is to determine whether the respondent’s decision is the correct and preferable one on the material before the Tribunal: see Drake at 589. It follows that the question for the Tribunal was whether, on the material before it, the decision to file an objection to Mr Schiffer’s discharge was the correct and preferable one. This required the Tribunal to consider, amongst other things, whether, on the material before it, there were reasons, relating to a purpose of the bankruptcy law, which justified the first notice of objection.
73 Reading the record of the proceeding before the Tribunal in its entirety, it is plain enough that the Tribunal directed itself to the question whether there were such reasons. In the course of the hearing, the Tribunal referred to the contents of the T documents. The T documents broadly supported the reasons set out in the first notice of objection. In providing these documents to the Tribunal under s 37(1)(b) of the AAT Act, the respondent held out that they were relevant to the Tribunal’s review.
74 Amongst other things, the T documents showed the extent of the respondent’s largely fruitless correspondence with Mr Schiffer; Mr Schiffer’s failure to pay the assessment; his failure, or disinclination, to supply information concerning his income and assets; the incomplete nature of the respondent’s investigations; the possibility of undisclosed assets; and the extent of the respondent’s difficulties in assessing whether Mr Schiffer ought to make other income contributions.
75 The hearing as recorded in the transcript showed that the Tribunal regarded these matters as pertinent to its decision on review. The matters were explored not only by the respondent’s representative but also by members of the Tribunal in questions directed to Mr Schiffer. The respondent’s representative addressed questions to him covering his failure to reply to correspondence and the AMP shares. The Tribunal augmented these questions with questions (deriving from the T documents and from the respondent’s cross-examination) about his failure to provide information about his assets (as, for example, the AMP shares and motor vehicles) and about his income (as, for example, about his employment), and about his failure to pay the assessment. Further, the Tribunal questioned Mr Schiffer about his relationship with other entities, with a view, it would seem, to determining whether further investigation might disclose income or assets of benefit to Mr Schiffer’s creditors. These matters were relevant to the respondent’s administration of Mr Schiffer’s bankrupt estate. The T documents and the evidence at the hearing showed, as the respondent’s counsel submitted in this court, “a concerted pattern of non-response” and “recurrent pattern of complete unwillingness to respond to a trustee”. The Tribunal had ample evidence that the respondent’s administration of Mr Schiffer’s estate was not complete, and that further investigation might be for the benefit of creditors.
76 The Tribunal’s conclusion, in its reasons, that, “in the result there is no satisfactory evidence before this Tribunal which would lead us to interfere with the decision under review”, indicates that it saw no basis on the evidence before it to set aside or vary the decision under review. This involved a finding that, on the evidence before it, there were reasons justifying the filing of the first notice of objection. Read as a whole and in light of what had happened at the hearing, the Tribunal’s reasons indicate that it was accepting as correct the reasons that had been advanced by the respondent.
77 This is plainly a case in which the Tribunal’s reasons for decision, which were given orally immediately after the hearing, should not be construed “with an eye keenly attuned to the perception of error”: see Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 286-287 and Wu Shan Liang at 271-272.
78 Counsel for Mr Schiffer suggested, in argument, that the Tribunal’s reasons were so deficient that they did not fulfil the requirements of s 43(2) of the AAT Act. It must be borne in mind, however, that s 43(2) expressly permits the Tribunal to give its reasons orally. Oral reasons are not subject to s 43(2B), which requires the Tribunal to include its findings on material questions of fact and a reference to the evidence and other material on which those findings were based. Pursuant to s 43(2A), a party to whom oral reasons are given may request written reasons within the time prescribed, and they will, of course, be subject to s 43(2B). The observations in Sullivan at 349 to which counsel referred concerned the requirements presently found in s 43(2B). They do not bear on reasons given orally. In the present case, no request was made pursuant to s 43(2A). The record before the court is of oral reasons provided by the Tribunal at the hearing.
79 Proceedings before the Tribunal are not adversarial. The parties are expected to inform it as best they can of the relevant facts. The Tribunal gave short, oral reasons immediately after a hearing in which it had canvassed with Mr Schiffer the matters that it considered relevant to its decision. Mr Schiffer’s case was simply that he had not earned the income that was the basis of the assessment, and that the AMP shares had belonged to his wife. He did not contest his failure to pay the assessment or to provide information to the respondent about his income and property. He specifically declined to provide further information to the Tribunal about the proceeds of the share sales. He did not otherwise challenge the respondent’s grounds or reasons for filing the first objection notice. In these circumstances, I can detect no error of law in the Tribunal’s decision, nor in its reasons. It was plainly open to it to conclude that there was “no satisfactory evidence” before it to result in a decision more favourable to Mr Schiffer. There is nothing in the record of the proceeding, the Tribunal’s decision or its reasons to indicate that the Tribunal committed an error of law in affirming the decision under review.
80 Finally, I note counsel for Mr Schiffer’s contention that:
The need for the Tribunal to turn its mind to the reasons is evident on a reading of the bald assertions offered by the Respondent:
(a) There is no evidence of how additional costs have been incurred in assessing the Applicant’s income when no assessments have been made;
(b) The time spent corresponding with the bankrupt is hardly considerable – 9 additional pieces of correspondence over a period of 2½ years;
(c) The inability to assess contributions is not explained by reference to the Respondent’s failure to make an assessment under s 139Y subsequent to the Notice of Contribution Assessment dated 10 November 1995;
(d) No explanation of the basis of the Trustee’s belief that the Applicant had failed to disclose all assets;
(e) The preparation of a Notice of Objection cannot be a reason for filing one;
(f) No explanation as to the need for additional time to prepare Notices of Income Contributions when the Trustee has otherwise been relatively inactive;
(g) There is no explanation of how the extension of the bankruptcy will allow the trustee to recoup additional expenditure;
(h) The Respondent Trustee’s request for information in respect of motor vehicles was never pursued, even questioned internally, yet it found its way into the First Notice without any reason as to the relevance and importance of the information.
81 These matters relate to the merits of the decision under review. Mr Schiffer might have raised them before the Tribunal, but he did not. There was no need for the Tribunal specifically to discuss them in its reasons, and it does not follow from the Tribunal’s failure to mention them that it did not properly discharge its review function.
82 For the reasons stated, I reject counsel’s final submission that the whole of the Tribunal’s decision was infected by a failure to afford Mr Schiffer procedural fairness; and I can detect no error of law in the Tribunal’s decision to affirm the respondent’s decision to file the first notice of objection. Accordingly I would dismiss the appeal under s 44(1) of the AAT Act, with costs.
83 Towards the close of the hearing in this court on 5 April 2001, counsel for the respondent drew my attention to a problem that may have arisen in connection with an order for costs made by the Registrar on 3 May 2000. I stated then that I should be prepared to reiterate the order and I would do so.
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I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. |
Associate:
Dated: 10 August 2001
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Counsel for the Applicant: |
Mr P A Norris appeared pro bono |
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Solicitor for the Applicant: |
Not represented |
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Counsel for the Respondent: |
Ms M E Kennedy |
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Solicitor for the Respondent: |
Home Wilkinson & Lowry |
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Date of Hearing: |
5 April 2001 |
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Date of Judgment: |
10 August 2001 |
