FEDERAL COURT OF AUSTRALIA

Dryden v Macks (Trustee in Bankruptcy) [2005] FCA 1480

ALEXANDER BARCLAY DRYDEN v PETER MACKS (TRUSTEE IN BANKRUPTCY)

No SAD 141 of 2005

FINN J

ADELAIDE

13 OCTOBER 2005

THE COURT ORDERS THAT:

1.         The application be allowed.

2.         The time for the applicant to apply to the Inspector-General for review under s 139ZA of the Bankruptcy Act be extended to 28 October 2005. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The applicant, Alexander Dryden, is an undischarged bankrupt.  He applies under s 33(1)(c) of the Bankruptcy Act 1966 (Cth) (“the Act”) for an extension of time in which to request the Inspector General to review a decision of his trustee in bankruptcy, Peter Macks, relating to a contribution assessment made by the trustee in 2003. 

2                     I have little material before me relating to the circumstances surrounding the bankruptcy or for that matter relating to the making of the contribution assessment in 2003.  That assessment was made under the provisions of Subdivision G of Division 4B, Part VI of the Act.  The power of review by the Inspector General is contained in s 139ZA of that Act.  Put shortly, it empowers the Inspector General, amongst other things, to review a trustee’s assessment if requested to do so by the bankrupt for reasons that appear to the Inspector General to be sufficient to justify a review.  A bankrupt’s request must under s 139ZA(3) be lodged with the Official Receiver’s office not later than 60 days after the day in which the bankrupt is notified of the trustee’s assessment.  It is apparent that that 60 day period has long since passed. 

3                     To explain both the reason for this application and the passage of time it is necessary to refer to at least some of the scanty material that is before me.  The assessment that was made by the trustee in June 2003 was apparently premised upon Mr Dryden having a gross annual income of $120,000 a year.  That figure was derived from documentation emanating from the company said to be Mr Dryden’s employer.  The contribution assessment made under the Act was in the amount of $17,478.93.  The trustee required that amount be paid for the year 2003/04 under s 139ZG(1) in eleven instalments.  The notice of the assessment sent to Mr Dryden indicated on its face that Mr Dryden could make a request to the Inspector General within 60 days if he disagreed with the assessment. 

4                     Mr Dryden has filed a significant amount of material in this proceeding.  It is apparent from it that he seems to have been unable to comprehend this communication to him (which was reiterated in advice also given to him by others over the ensuing year and a half).  It is not that Mr Dryden did not seek to challenge in various ways the assessment so made, rather he went about it in ways not provided for under the Bankruptcy Act.  He, variously, approached his trustee, the Administrative Appeals Tribunal, the Insolvency and Trustee Service of Australia (ITSA) and the Legal Services Commission of South Australia seeking redress or review of one form or another but in the event always inappropriately. 

5                     Central to his grievance was the assertion that he never in fact had the employment relied upon by the trustee.  Rather he contended that the documentation upon which the trustee relied related to an employment which did not eventuate because it was premised upon the coming into existence of a joint venture which failed to materialise.  In consequence he had simply worked for his employer as a commission agent making allegedly very little money.  He tried to bring this to the attention of his trustee but unavailingly.  Because of non-payment of the contributions, the trustee eventually sought direct payment from the employer which seems to have produced little by way of monetary satisfaction.  That at least revealed Mr Dryden’s income may not have been of the order the trustee had assumed. 

6                     It is not for me to speculate why the trustee has acted as he has in this matter.  What has brought Mr Dryden’s grievance to a head was that in January 2005 the trustee wrote to the Official Receiver objecting to the discharge of Mr Dryden from bankruptcy, that objection being based on his failure to pay the contribution assessment he was liable to pay under s 139ZG of the Act.  The consequence of this objection was that Mr Dryden would not be discharged from bankruptcy for a further five years:  see s 149 and 149A of the Act:  see also s 149D(1)(f). 

7                     When the matter came on for directions, I directed amongst other things that the trustee file submissions in relation to the application.  The trustee has not seen fit to do so.  Rather, he filed an affidavit enclosing a copy of his Notice of Objection to Discharge and he made the following observations:

“4.       I have not been satisfied by the bankrupt by way of affidavit or otherwise to review the Notice of Objection to Discharge.

5.         Accordingly I presently see no reason or basis on which the decisions made by me and other authorities can be reviewed.”

To say the least, this is not particularly helpful in resolving the matter at hand. 

8                     When the matter was called on for hearing the trustee failed to appear notwithstanding that it has been communicated to his office that he was required to appear personally or by a legal practitioner.  The matter had been set down for hearing on today’s date by a direction given on 27 July 2005.  An apology for non-attendance from an employee of the trustee was received after the hearing was completed.  Needless to say I expect to hear further from the trustee personally.  His conduct in relation to this application has been unacceptable. 

9                     It is apparent from the material Mr Dryden has filed that he has sought albeit ineffectually to challenge the trustee’s decision for quite some time.  I have material before me that at least raises the question whether the material before the trustee may have been incorrect (the trustee has not sought to controvert this) and that the assessment may have been an inappropriate one.  I express no view on whether in fact it was.  What is revealed in my view is that if it was, then Mr Dryden is being punished harshly for a mistake unwittingly made by the trustee.  Again I express no view on whether there was a mistake.  Nonetheless, Mr Dryden will have to endure five additional years before he is discharged if there was such a mistake. 

10                  If Mr Dryden had simply stood by and let time pass without seeking redress of some form, I would not have contemplated extending the time under s 33(1) of the Act.  However, given the very unusual circumstances of this matter and the less than helpful stance taken by the trustee I am prepared to make the order sought.  Mr Dryden should be given the opportunity to make his request to the Inspector General.  I will order accordingly.

Associate:

Dated:              21 October 2005