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Administrative Appeals Tribunal of Australia |
Last Updated: 24 January 2011
CATCHWORDS – PRACTICE AND PROCEDURE – summonses – circumstances in which request to issue may be refused – refused
BANKRUPTCY – identification of decision or decisions under review
Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons
Pty Ltd (1952) 72 WN (NSW) 250
Botany Bay Instrumentation &
Control Pty Ltd v Stewart [1984] 3 NSWLR 98
Commissioner of Taxation
[1997] FCA 1504
Cosco Holdings Pty Ltd v Commissioner for Taxation
& Anor [1997] FCA 1504
Drake v Minister for Immigration and Ethnic
Affairs [1979] AATA 179; (1979) 2 ALD 60; 24 ALR 577
Hong Ye v Minister for Immigration
and Multicultural Affairs (1998) 82 FCR 468; 153 ALR 327; 55 ALD
358
Hunt v Wark (1985) 40 SASR 489
Mandic v Phillis [2005]
FCA 1279; 225 ALR 760
Pharm – a – Care Laboratories Pty
Ltd v Commonwealth of Australia [2009] FCA 1203
Sullivan v Department
of Transport (1978) 20 ALR 323; 1 ALD 383
Trade Practices Commission v
Arnotts Limited (No 2) (1989) 88 ALR 90; (1989) 21 FCR 306
Waind v
Hill and National Employers’ Mutual General Association Ltd [1978] 1 NSWLR
372
Wilson v Minister for Aboriginal and Torres Strait Islander
Affairs [1996] HCA 18; (1996) 189 CLR 1
Witness v Marsden [2000] NSWCA
52; 49 NSWLR 429
Re Becker and Minister for Immigration and Ethnic
Affairs [1977] AATA 12; (1977) 1 ALD 158; 15 ALR 696
Re General
Merchandise and Apparel Group P/L and CEO of Customs and Australian Weaving
Mills [2009] AATA 988; (2009) 51 AAR 1; 114 ALD 289
Re Trade Practices
Commission v Kimberley Homes Pty Limited [1989] FCA 262
Administrative Appeals Tribunal 1975 ss 3, 3(1), 25(4), 37, 40, 40(1A),
40(1B), 40(1C), 40(1)(a) and (2), 40(7)
Bankruptcy Act 1966 ss 40,
43, 43(2)(a) and (b), 44, 44(1)(a) and (c), 52, 149(1), 149(4), 149A, 43(2),
149G, 149A(2), 149B, 149C(1), 149C(1A), 149D(1),
149D(1)(ab),(d),(da),(e),(f),(g),(h),(ha),(k),(ma), 149D(1)(b), 149D(1)(i),
149K, 149K(1)(a), 149K(2), 149K(3), 149K(3)(a), 149K(3)(b), 149K(4), 149K(5),
149N, 149N(1A), 149N(1B), 149N(2), 149N(2)(a), 149N(3), 149P(6), 149Q(a)
Bankruptcy Amendment Act 1991 s 27
Bankruptcy Regulations
1996 r 13.07(1) and (2)
Corporations Act 2001 ss 206A, 206A(1),
206A(1A), 206B, 206BA, 206C, 206D, 206E, 206EA, 206EAA, 206F, 206F(5), 206G,
206G(1) and (3)
Privacy Act 1988 s 14
DECISION AND REASONS FOR DECISION [2011] AATA 25
ADMINISTRATIVE APPEALS TRIBUNAL )
) 2010/0557
GENERAL
ADMINISTRATIVE DIVISION )
Re: STEVE PHILLIPS
Applicant
And: INSPECTOR-GENERAL IN BANKRUPTCY
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Place: Melbourne
Date: 24 January 2011
Decision: The Tribunal:
S A Forgie
Deputy President
REASONS FOR DECISION
Mr Phillips applied for review of a decision of the Inspector-General in Bankruptcy (Inspector-General) regarding objections to his bankruptcy filed by the trustee of his bankrupt estate. He asked the Tribunal’s Registry to issue two summonses. One was addressed to the firm of solicitors, Blake Dawson, and the other to the association of accounting, audit and advisory firms known as Pitcher Partners. I have decided to authorise the District Registrar of the Melbourne Registry of the Tribunal and the Deputy Registrars to refuse to issue these summonses. These are my reasons for doing so.
SUMMONSES
The power to issue a summons
2. The power to issue a summons is found in 40(1A) of the Administrative Appeals Tribunal Act 1975 (AAT Act). It provides that:
“Subject to subsection (1B), for the purposes of the hearing of a proceeding before the Tribunal, the member presiding at the hearing, the Registrar, a District Registrar or a Deputy Registrar may summon a person to appear before the Tribunal at that hearing:
(a) to give evidence; or
(b) to give evidence and produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons; or
(c) to produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons.
The power to require appearance or production at a hearing extends to the power to make a similar requirement at a directions hearing.[1]
3. Most commonly, summonses are issued by a District or Deputy Registrar rather than a member. They may not refuse a request to issue a summons unless their refusal is authorised by a presidential member (including a Deputy President[2]), a senior member or an authorised member.[3] In this case, a Deputy Registrar has referred Mr Phillips’ request to issue two summonses to me. That she has done so accords with the Tribunal’s usual practice when the relevance of the material sought in the summonses to the issues in the case is not readily apparent from its face.
The summonses that Mr Phillips asks to be issued
4. Mr Phillips asked that a summons be issued requiring Pitcher Partners to appear at the Tribunal and to:
“1. Provide copies of all records documents Banking details & Identify the party and/or parties funding Pitcher Partners n going investigation into the affairs of Steve Phillips.
5. He also asked that a summons be issued requiring Blake Dawson to appear at the Tribunal and to “Provide copies of all records documents to and from Blake Dawson and Pitcher Partners and the Trustee.”
General principles relating to the issue and refusal of summonses
6. In Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor,[4] Spender J approved the approach taken by the Tribunal in the particular case in applying to summonses for the production of documents under the AAT Act the principles applicable to subpoenas duces tecum[5] issued by courts. In view of that and in view of the Tribunal’s being based on the judicial model[6] and its having been given tools consistent with those given to courts,[7] it seems to me that the principles developed by the courts in relation to subpoenas provide a sound guide to the manner in which summonses are issued and refused under the AAT Act. This is the view I took in Re General Merchandise and Apparel Group Pty Ltd and Chief Executive Officer of Customs and Australian Weaving Mills[8] and I take it again in this. In particular, I adopt as part of these reasons my analysis of the principles developed in the courts in relation to setting aside subpoenas.[9] I also adopt the further principles that I drew after considering those principles in light of the particular provisions of the AAT Act.[10] In this matter, only some of the principles are applicable and I will focus on them in these reasons.
7. It is important to remember that, like a subpoena, a summons is a tool used for “the invasion ... of the rights of a stranger”.[11] Rights that are invaded are those of the sort that protect personal privacy and business and commercial confidentiality. They are not unfettered rights and those recognised in the Privacy Act 1988 provide an example. That legislation protects from disclosure personal information but the protection it provides is qualified. Where a person has possession or control of a record containing personal information about another person, the first person is prohibited from disclosing it except in the circumstances arising under Information Privacy Principle (IPP) 11.1.[12] Relevant in this case is IPP 11.1(d), which permits disclosure where “the disclosure is required or authorised by or under law”. Responding to a summons properly issued under s 40(1A) is clearly a disclosure authorised by or under the law.
8. With regard to subpoenas:
“ It is a well-accepted rule that a subpoena may be set aside as oppressive and as an abuse of the process of the court if it requires the production of documents which are manifestly irrelevant to the issues between the parties. ...”[13]
The rule must apply equally to a summons issued at the request of a party in the Tribunal for s 40(1A) only confers power to issue it “for the purposes of the hearing”.
9. The courts have developed a number of subsidiary rules that could also be regarded as illustrations of the general rule. Examples were set out by Powell J in Botany Bay Instrumentation & Control Pty Ltd v Stewart[14] when he said that:
“... a reference to the authorities makes it tolerably plain that the court will exercise its undoubted jurisdiction to set aside a subpoena in a variety of cases, as, for example:
This summary was accepted by Beaumont J in Trade Practices Commission v Arnotts Limited (No 2),[16] Conti J in Mandic v Phillis[17] and Flick J in Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia.[18]
Power to summon dependent upon its exercise being “for the purposes of the hearing”
10. As a summons is a tool that authorises invasion of privacy in this way, it must be used with great care. In particular, it must not be used when its use is not authorised by s 40(1A) as refined by other provisions in s 40. Having regard to the words of s 40(1A), therefore, it must not be used for a purpose other than that for which it was given. The purpose for which it has been given is “for the purposes of a hearing before the Tribunal”[19] or for the purposes of a directions hearing or of an alternative dispute resolution process.[20] The word “proceeding” is defined in quite broad terms in s 3(1) of the AAT Act. Its first meaning, set out in (a) of the definition, includes and application to the Tribunal for review of a decision. The word “hearing” is not defined but, in the context of judicial and quasi judicial proceedings, it means “to listen to and judge (a case)”.[21] Therefore, in the context of this case, the power to summon a person under s 40(1A) may only be used for the purposes of listening to and coming to a decision on Mr Phillips’ application for review of the Inspector-General’s decision.
How to work out if exercised “for the purposes of the hearing”
11. The statutory limitation upon the exercise of the power to summon mirrors the limitation placed on the courts’ power to issue a subpoena at common law. Beaumont J stated the general test in Trade Practices Commission v Arnotts Ltd[22] when considering a subpoena issued at the request of Arnotts Ltd (Arnotts) to Mattingly Pty Ltd (Mattingly). Mattingly was a principal to the proceedings between Arnotts and the Trade Practices Commission. Beaumont J said:
“ The general test for present purposes is well settled. The issue of a subpoena will be an abuse of process if it is not used for a legitimate forensic purpose: see Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 at 100-1. But, as Deane and Gaudron JJ observed in Hamilton v Oades [1989] HCA 21; (1989) 85 ALR 1 at 11, the court’s general powers in this area have a dual aspect: “The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice ... [This] power ... is not restricted to defined and closed categories ... In this context injustice is not simply a question of the purpose or motive for which the relevant proceedings were instituted but includes a consideration of the consequences of the proceedings for the person invoking the power. The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously and unfairly burdensome’, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment’: Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 62 ALJR 389 per Deane J at 411; [1988] HCA 32; 79 ALR 9 at 45.”
In other words, the present inquiry is not limited to an analysis of the true purpose of Arnotts in procuring the issue of the subpoena. It is also material to look at the impact of the subpoena upon Mattingly.
Without restricting this inquiry, it is convenient to address the present application in the first instance by reference to two questions:
(1) Does the material sought have an apparent relevance to the issues in the principal proceedings, ie. is adjectival, as distinct from substantive, relevance established? Does the subpoena have a legitimate forensic purpose to this extent? This involves a consideration of the matter from the standpoint of Arnotts.
(2) Is the subpoena seriously and unfairly burdensome or prejudicial? This is to look at the matter from the point of view of Mattingly.”[23]
12. Adjectival relevance does not mean that the material that is sought under the subpoena will necessarily be admissible in the hearing. A court does not determine questions of admissibility on an application to set aside a subpoena.[24] Where it does start is with the statement of claim and the pleadings for they define the issues the between the parties in a civil case.
13. Pleadings have no place in the Tribunal for it is not the parties who
define and curtail the issues that it must consider but
the individual decision
under review and the legislation under which it is made. That follows from the
task that the Tribunal has
been given to perform. Its task is to exercise the
power given to it by
s 25(4) of the AAT Act to “... review any
decision in respect of which application is made to it under any
enactment.”
In Drake v Minister for Immigration and Ethnic
Affairs, Bowen CJ and Deane J explained that:
“ The function of the Tribunal is ... an administrative one. It is to review the administrative decision that is under attack before it. In that review, the Tribunal is not restricted to consideration of the questions which are relevant to a judicial determination of whether a discretionary power allowed by statute has been validly exercised. ...
The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal. ...”[25]
14. In deciding whether the decision was the correct or preferable decision, the Tribunal must look not only to whether the law has been correctly applied but to whether the decision is correct in light of that law and on the basis of all of the relevant material. If a range of decisions would be correct and not merely one decision, merits review requires that the decision that is preferable be chosen from that range of correct decisions. The choice of the preferable decision is made having regard to matters such as any criteria or considerations prescribed by the relevant legislation or inherent in the purposes it seeks to achieve and having regard to any policy consistent with those criteria or considerations.
15. In Sullivan v Department of Transport,[26] it was said by Deane J, with whom Fisher J agreed, that:
“... 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 in 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 which a particular party wishes to present his case. ...”[27]
16. In this passage, his Honour has recognised the overriding duty of the Tribunal to reach the correct or preferable decision even if there may be many occasions on which it thinks that the parties have identified the appropriate issues. In order to work out what is the correct or preferable decision, regard must first be had to the decision under review and the legislation under which it was made. The scope of the review must be determined. At times, it will require consideration of the same issues as those considered by the decision-maker in making the decision in the first place. At others, the legislation conferring the power to seek review in the Tribunal may limit the issues that may be considered on review.
17. Once the issues have been isolated, it is possible to consider whether the material sought by the person requesting the issue of the summons would have any adjectival or apparent relevance to the issues that the Tribunal must decide in reviewing the decision.
What is a fishing expedition?
18. A fishing expedition has been described by Owen J in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd[28] in this way:
“A ‘fishing expedition’, in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not.”[29]
As King CJ, with whom both White and Millhouse JJ concurred, said in Hunt v Wark:[30] “... There must be some reason to suppose that the documents sought will be capable of being used ....”[31]
19. Expressing this principle in terms of s 40(1A) of the AAT Act, a request to issue a summons for a purpose of this sort will have grave difficulty in meeting the test that it be issued for the purposes of the hearing of the proceeding.
IDENTIFYING THE ISSUES THAT MUST BE DECIDED ON REVIEW
20. In this section of my reasons, I will set out the background to the decision of which Mr Phillips seeks review.
The sequestration order
21. On 28 August 2006, Federal Magistrate Riethmuller made a sequestration order against the estate of Mr Phillips. His power to do so is drawn from s 43 of the Bankruptcy Act 1966 (Bankruptcy Act). Section 52 of that legislation required Riethmuller FM to be satisfied of the matters stated in the creditor’s petition presented to it, service of that petition and of the fact that the debt or debts on which the petitioning creditor relied was or were still owing. Section 44 regulates the circumstances in which a creditor’s petition may be presented to the Court. Among them was that Mr Phillips owed a debt of at least $2,000 or debts totalling that amount and that he had committed an act of bankruptcy within six months of the presentation of the creditor’s petition to the Court.[32] An act of bankruptcy is one or more of the acts described in s 40 of the Bankruptcy Act.
The effect of the sequestration order
22. As soon as the sequestration order was made, Mr Phillips became a bankrupt.[33] He continues to be a bankrupt until his bankruptcy is either annulled – and it has not been – or he is discharged by force of s 149.[34] Section 149(4) is the relevant provision as Mr Phillips became bankrupt after the commencement of s 27 of the Bankruptcy Amendment Act 1991. Under it, but subject to s 149A, he is discharged at the end of the period of three years from the date on which he filed his statement of affairs. Mr Phillips filed his statement of affairs but the date on which he did so is in question. In the Extract from the National Personal Insolvency Index (NPI Index) the date of filing is shown as 27 September 2006.[35] The Statement of Affairs appearing at T 5 of the T documents bears a stamp reading “RECEIVED 21/9/2006”.[36] There may be a reason why the date on the stamp is not reflected in the NPI Index. I note that a document that purports to be an unrevised and unaltered extract of the information in the Index is, in the absence of evidence to the contrary, proof of the information stated in it.[37] Whether there is evidence to the contrary is a matter that the parties and Mr Phillips’ trustee might want to consider at another time.
The power to extend the period for which a person is bankrupt
23. Section 149A qualifies the operation of s 149(4). If an objection to
the discharge of a bankrupt has taken effect in accordance
with s 149G and that
objection has not been withdrawn or cancelled, the period referred to in s
149(4) is extended. It is extended
from the prescribed date by the prescribed
number of years referred to in
s 149A(2). As Mr Phillips has been in
Australia at all relevant times, the prescribed date is the date on which he
filed his statement
of affairs. The prescribed number of years depends on the
ground on which the objection was lodged.
24. Objections are the subject of Subdivision B of Division 2 of Part VII of
the Bankruptcy Act. Section 149B provides that, subject to the provisions of
that Subdivision and at any time before a bankrupt is discharged from bankruptcy
under
s 149, the trustee may file a written notice of objection to the
discharge. The trustee files it with the Official Receiver. As a general
rule,
the 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, establishes that the ground or each of those grounds; and
(c) state the reasons of the trustee for objecting to the discharge on that ground or those grounds.”[38]
The trustee does not have to give reasons in accordance with (c) of these requirements if the ground on which the objection is made is a ground specified in s 149C(1A).[39]
The first objection: first ground under s 149D(1)(i)
25. Mr Andrew Yeo is a partner of Pitcher Partners and is one of the Joint and Several Trustee of Mr Phillips’ bankrupt estate. The other is Mr Gess Rambaldi. Mr Yeo filed two objections. The first, made on 22 June 2009, was on the ground that:
“the bankrupt has failed, whether intentionally or not, to disclose to the trustee a liability of the bankrupt that existed at the date of the bankruptcy”.[40]
That had the effect of extending Mr Phillips’ bankruptcy to 21 September 2014 unless the objection was cancelled or withdrawn before that date.
26. The reason given by Mr Yeo for filing his objection was this:
“The bankrupt has not fully disclosed the liabilities which were outstanding to Bankwest in respect of a Bankwest Mastercard as at the date of his bankruptcy and accordingly, my investigations into his examinable affairs have been protracted.”[41]
The second objection: second ground under s 149D(1)(b)
27. On 4 September 2009, Mr Yeo filed a further notice of objection based on two grounds.[42] The first ground is found in s 149D(1)(b):
“after the date of the bankruptcy, the bankrupt contravened section 206A of the Corporations Act 2001 (disqualification from managing corporations)”.
Section 206A of the Corporations Act 2001 (Corporations Act) creates an offence of strict liability[43] to which there is only one defence. Section 206A(1) provides:
“A person who is disqualified from managing corporations under this Part commits an offence if:
(a) they make, or participate in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
(b) they exercise the capacity to affect significantly the corporation’s financial standing; or
(c) they communicate instructions or wishes (other than advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation) to the directors of the corporation:
(i) knowing that the directors are accustomed to act in accordance with the person’s instructions or wishes; or
(ii) intending that the directors will act in accordance with those instructions or wishes.”
28. The sole defence to a contravention of s 206A(1) rests on the person’s having “... permission to manage the corporation under either section 206F or 206G and their conduct was within the terms of that permission.”[44] Section 206F provides that the Australian Securities and Investments Commission (ASIC) may disqualify a person from managing corporations in various circumstances.[45] Section 206F(5), however, provides some amelioration of the disqualification provisions. It provides:
“ASIC may give a person who it has disqualified from managing corporations under this Part written permission to manage a particular corporation or corporations. The permission may be expressed to be subject to conditions and exceptions determined by ASIC.”
29. Section 206G confers power on the Court to grant leave to a person disqualified from managing corporations if the person was not disqualified by ASIC. A disqualification of that sort might arise by operation of ss 206B, 206BA or s 206EA of the Corporations Act or by order of the Court under ss 206C, 206D, 206E or 206EAA. Under s 206G, the Court may give leave to such a person to manage corporations, a particular class of corporations or a particular corporation and to impose such exceptions and conditions as it determines.[46]
30. After referring to the evidence in 13 separate paragraphs, Mr Yeo stated his reasons for filing an objection under s 149D(1)(b):
“The investigations of the bankrupt’s conduct and examinable affairs indicate that the bankrupt has continued to act as a director of Phoenix after the date of the bankruptcy and notwithstanding his resignation as director.
I believe that these objections may help make the bankrupt discharge duties that the bankrupt has previously failed to discharge. I have limited means available to me to induce the bankrupt to discharge these duties.”[47]
The second objection: third ground under s 149D(1)(da)
31. The third ground of Mr Yeo’s objection was that:
“after the date of the bankruptcy, the bankrupt intentionally provided false or misleading information to the trustee”.
This is set out in s 149D(1)(da) of the Bankruptcy Act.[48] Although he was not required to give reasons by virtue of s 149C(1A), Mr Yeo’s reasons were those I have set out in the previous paragraph.
Internal review of a decision to file a notice of objection
32. Apart from review on his own initiative[49] and at the request of the Ombudsman,[50] “the Inspector-General may review a decision of a trustee to file a notice of objection” if requested by the bankrupt for sufficient reason.[51] A bankrupt may make a request for review by lodging a written request no later than 60 days after being “notified of the trustee’s objection”.[52] That request must be accompanied by a copy of the notice of objection and any documents relied upon in support of the request.[53] The Official Receiver must endorse the date of lodgement on the request and send it and its accompanying documents to the Inspector-General.[54]
33. Within 60 days of lodgement of the request, the Inspector-General must decide whether to review the decision. If the decision is to review, the Inspector-General must also come to a decision within that period.[55] If the Inspector-General does not give a bankrupt written notice of a decision within 60 days of “... lodgment of a request by a bankrupt for the review of the trustee’s decision to file a notice of objection ...”, s 149P(6) provides that “... the Inspector-General is taken to have reviewed the decision and confirmed it under subsection 149N(3).”
34. In a letter dated 21 August 2009, Mr Hone wrote to the Official Receiver on behalf of Mr Phillips. He stated that he acted for Mr Phillips and that he was instructed to request review of the trustee’s decision. He attached the notice of objection dated 22 June 2009 and two supporting documents.[56] I note that the letter was addressed to the Official Receiver for the attention of a particular officer in Insolvency and Trustee Services Australia (ITSA). It was addressed to a facsimile number and there is no reason to question the accuracy of that number.
35. In a letter dated 25 September 2009, Mr Phillips also wrote to the Official Receiver and the Inspector-General at ITSA’s street address and marked it for the attention of the same officer. He referred to the request previously submitted on 21 August 2009 on his behalf and to a letter he had received from Pitcher Partners on 7 September 2009 and yet dated 4 August 2009.[57] From the context of the letter, it appears that he was referring to the notice of objection dated 4 September 2009 and filed on that day. The letter took the form of a statutory declaration.
36. On 9 November 2009, Mr Phillips wrote again to the Official Receiver and the Inspector-General. He concluded by noting that he had heard nothing since he had written his two earlier letters and, in view of that, considered that he had done his time and was therefore discharged from bankruptcy.[58]
37. On 16 November 2009, a delegate of the Inspector-General wrote to Mr Phillips. She first noted that Mr Yeo had filed two notices of objection and that Mr Phillips’ request for review dated 9 November 2009 was out of time. The delegate did not receive the earlier requests.[59] She went on to say that the Inspector-General was, however, “... prepared to review the trustees [sic] decision to lodge an objection ... providing you [Mr Phillips] submit a copy of the notice of objections and any documents on which you rely to support the request.” No mention is made in the letter of the Inspector-General’s power to extend the time within which a bankrupt may request a review. There would appear to be no such power in the Bankruptcy Act. It would seem, however, that the delegate was not intending to suggest that there was any for the Inspector-General’s power to review on his own initiative is not subject to a time limit. That she was relying on this power becomes apparent when regard is had to her further letter dated 21 January 2010 setting out the decision on the review.[60]
The Inspector-General’s decisions on review
38. The Inspector-General’s powers on review are those set out in s 149N. Section 149N(1) provides:
“On a review of a decision, if the Inspector-General is satisfied that:
(a) the ground or grounds on which the objection was made was not a ground or were not grounds specified in subsection 149D(1); or
(b) there is insufficient evidence to support the existence of the ground or grounds of objection; or
(c) the reasons given for objecting on that ground or those grounds do not justify the making of the objection; or
(d) a previous objection that was made on that ground or those grounds, or on grounds that included that ground or those grounds, was cancelled;
the Inspector-General must cancel the objection.”
If the Inspector-General is not satisfied of one or more of these matters, he or she must confirm the decision.[61]
39. Section 149N(1A) provides:
“An objection must not be cancelled under subsection (1) if:
(a) the objection specifies at least one special ground; and
(b) there is sufficient evidence to support the existence of at least one special ground specified in the objection; and
(c) the bankrupt fails to establish that the bankrupt had a reasonable excuse for the conduct or failure that constituted the special ground.
For this purpose, special ground means a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma).”
In applying s 149N(1A), s 149N(1B) provides that “... no notice is to be taken of any conduct of the bankrupt after the time when the ground concerned first commenced to exist.”
40. Section 149N(2) provides for the time at which a cancellation takes effect. At the earliest, it does not take effect until the end of the period within which an application may be made to this Tribunal for review of the decision. If an application is made to the Tribunal for review, it does not take effect until the Tribunal’s decision is made.[62]
41. A letter dated 21 January 2010 began with a reference to a letter
“submitted” by Mr Phillips on 3 December 2009 and
requesting the
Inspector-General to review a decision of the trustees of his bankrupt estate
“... to file two notices of objection
to ... discharge
...”.[63] It
went on to specify the three grounds specified in the two
“Objections”. The reference to Mr Phillips’ request
having
been submitted on
3 December 2009 must be a reference to the day on which he
provided further copies of the Notices of Objection as requested in the
letter
of 16 November 2009. There is no reference to them in the T documents on or
around that date but it is the only logical explanation
of the reference.
42. The letter referred to the two notices of objection but Mr Phillips’ request for a review was described as “... a request for a review of the Trustee’s decision to lodge the Objections ...”.[64] In summary, the Inspector-General’s decision was:
“... to confirm the Trustee’s Objection under the ground in section 149D(1)(b) and to cancel the grounds in Section 149D(1)(da) and (i). ...”
The delegate went on to say that the effect of the decision was that Mr Phillips would be discharged from bankruptcy on 28 September 2011.
43. The reasons do not separate the grounds by reference to the individual notices of objection. Instead, they have been considered as “Grounds for Objection” and referred to as Grounds 1, 2 and 3.
Application for review
44. An application may be made to this Tribunal in two circumstances but only one is relevant. It is provided for in s 149Q(a):
“An application may be made to the Administrative Appeals Tribunal for the review of:
(a) a decision of the Inspector-General on the review of a decision of the trustee to file a notice of objection;
(b) ...”
DOES THE MATERIAL SOUGHT BY MR PHILLIPS HAVE ADJECTIVAL OR APPARENT RELEVANCE TO THE ISSUES?
Identification of the decision(s) under review
45. The starting point in my consideration of whether the material sought by Mr Phillips in each of the two summonses has adjectival or apparent relevance to any of the issues that I must decide in this matter lies with the decision or decisions of which he has sought review.
46. Identification of the decision or decisions under review is not as easy
as might first be thought. When he applied to this Tribunal
for review, Mr
Phillips described the Inspector-General’s decision by attaching a copy of
the letter dated
21 January 2010 setting out the Inspector-General’s
decisions and reasons regarding each of the two notices of objection. That
suggests one decision but, on my understanding of events, Mr Yeo filed two
notices of objection and Mr Hone wrote a request for review
of the decision to
file the first and Mr Phillips wrote to the Official Receiver and the
Inspector-General about the second. The
provisions of the Bankruptcy Act I have
set out above treat each decision to file a notice of objection as a separate
decision. The right to request review is a
right to request review of the
decision to file a notice of objection.
47. Where two notices of objection have been filed, it seems to me that two separate requests for review must be lodged. The Inspector-General is obliged to make a decision on a request to review a notice of objection. When there are two such notices, the Inspector-General’s obligation remains the same. As a matter of practical convenience, the Inspector-General may choose to review both decisions at the same time and to give reasons. The fact that he does so cannot change the proper characterisation of the process he is undertaking from the review of two decisions to file notices of objection to a review of one decision to file a notice of objection. The reason why it cannot is that different consequences flow from a decision setting aside a single ground of objection in a notice of objection when only one is specified than from a decision to the same effect when more than one is specified.
48. I will come back to this point for there is another difficulty that must
first be dealt with. If I were to take Mr Phillips’
letters of 21 August
2009 and
25 September 2009 as requests properly lodged with the Official
Receiver for review of the first notice of objection and the second
notice of
objection respectively, the trustee’s decision to file them would be taken
to have been confirmed under
s 149P(6). That would have to follow from the
fact that, even though the delegate did not receive them, the deeming provisions
of s 149P(6) hinge on their having been lodged (with the Official Receiver) and
not with their having been received by the delegate of the
Inspector-General.
49. In the particular circumstances of this case, I have decided that neither of the earlier requests complied with s 149K(3) even though both included a copy of the relevant notice of objection and any documents on which Mr Phillips relied. The difficulty that I have with the earlier request is that I am not satisfied that it was “lodged” as required within the specified time limit. The Bankruptcy Act does not contain any provisions explaining what is meant by the word or how it is achieved.
50. There are authorities considering the meaning of the word “lodge”. Among them is Hong Ye v Minister for Immigration and Multicultural Affairs,[65] in which the Full Court of the Federal Court concluded:
“... [W]hen the question is not whether a proceeding has commenced but merely whether a document has been ‘lodged’ there is no difficulty with the conclusion that the document has been ‘lodged’ when it is physically deposited with the court or tribunal or when it has come into the possession of the court or tribunal by some other means such as by post or facsimile transmission.”[66]
With particular reference to lodgement by post and by facsimile, the Full Court said:
“... The means by which possession is obtained does not matter. It could come about when an application is delivered into the hands of the Registry staff or, if the application is posted, when it is received by the Registry. When an application for review is sent by facsimile transmission to a facsimile machine that is located in the Registry the application will be in the possession of the Registry when the transmission is complete ...”[67]
51. The word “file” is also used in the Bankruptcy Act and that is a word that, in a court or Tribunal context, has a particular meaning. In Hong Ye v Minister for Immigration and Multicultural Affairs, the Full Court distinguished between “filing” and “lodging” emphasising that the two are not synonymous:
“... “Filing” is the word used to describe the process of placing a document in the records of a court or its registry ...”.[68]
Under the Bankruptcy Act, the trustee must “file” and not “lodge” a notice of objection.
52. The only evidence that I have regarding the manner in which and time at which Mr Hone’s request was made is the document itself and the fact that, as a copy is in the T documents, a copy must be in the relevant file of the Official Receiver or Inspector-General in Bankruptcy. It is addressed to a facsimile number but there is none of the normal print out on the top of the document showing that it was received by facsimile. It has no date stamp showing when it was received by the Official Receiver. In light of the Inspector-General’s contention that the delegate did not receive the request as she should have and in the particular circumstances of this case, I am satisfied that it has been lodged at some time but am not prepared to find that it was lodged within the 60 day time period. As it was not lodged within the time limit and there is no power to extend that time, s 149P(6) does not deem the Inspector-General to have made a decision confirming the trustee’s decision to file the first notice of objection.
53. With regard to Mr Phillips’ letter dated 25 September 2009, I am not satisfied that, in this case, it should be regarded as a request for review. At no stage does he use that language and it would require some creative interpretation to read a request of that sort into his letter. Again, as there was no request, no decision was deemed to have been made under s 149P(6).
54. It follows that the only decision or decisions that have been made by the Inspector-General are to be found in the delegate’s letter dated 21 January 2010. I do not propose to decide whether there is one decision or whether there are two decisions for it is a matter which I should first ask the parties to consider before I come to a decision. If there are two, the next question to consider will be whether Mr Phillips sought review of both or of only the Inspector-General’s decision, or that part of it, regarding the trustee’s decision to file a notice of objection on 4 September 2009 on two grounds of objection. It may be relevant to take into account the fact that, if there are two decisions, the Inspector-General’s decision to cancel the first ground of objection under s 149D(1)(i) would lead to the conclusion that the notice of objection would not be supported by any objection. The Inspector-General’s decision on the first notice of objection would be in Mr Phillips’ favour. If he did not seek its review, cancellation of the first objection in the first notice of objection would mean that cancellation took effect 28 days after the terms of the decisions and the reasons for them were given to Mr Phillips.[69]
Does the material sought by Mr Phillips have adjectival or apparent relevance to the issues?
55. The questions I have asked the parties to consider further are relevant to the ongoing conduct of this matter but the answers to them do not affect the question I must ask myself now. The short answer is that the material sought in the summonses has no relevance at any level to the issues that must be considered if all three grounds of objection are, or any one of them is, in issue in this matter. Who is funding the trustee has no relevance, adjectival, apparent or otherwise, to the issues I must consider. They are whether:
56. The issues in relation to 1 and 3 are self evident and who is
funding the trustee’s investigation into Mr Phillips affairs
or those of
Beijing Garden Resorts Pty Ltd or Phoenix International Group Pty Ltd does not
assist me in deciding whether
Mr Phillips has engaged in the behaviour
described. As to the second ground, which may (or may not) turn out to be the
only ground
in contention, I have set out the provisions of s 206A of the
Corporations Act. Again, information relevant to the funding of the
trustee’s investigations is not relevant. What is relevant is Mr
Phillips’
behaviour in relation to any corporation such as Beijing Garden
Resorts Pty Ltd or Phoenix International Group Pty Ltd.
57. Mr Phillips also asked that a summons be issued requiring Blake Dawson to appear at the Tribunal and to “Provide copies of all records documents to and from Blake Dawson and Pitcher Partners and the Trustee.” He has not specified the subject matter of the records and documents he seeks or how they will be relevant to the issues raised in the consideration of all or any of the grounds of objection. He has given me no basis on which I can come to a view that there will be records or documents that will have some apparent or actual relevance. All that he has shown to me in the second summons is a desire to go through the records and documents to see if he can find anything he thinks may be relevant. He is engaging in a fishing exercise and I refuse to give him the block and tackle to do so by issuing the second summons.
58. For these reasons, I refuse Mr Phillips’ request to issue the two
summonses set out at [4] and [5] above.
I certify that the fifty eight preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: .......................................................................
Leah Berardi, Associate
Date of Hearing 13 January 2011
Date of Decision 24 January 2011
Applicant Mr Steve Phillips
Solicitor for the Respondent Ms Fiona Spencer
Blake Dawson
[1] AAT Act, s
40(1B)
[2] AAT Act, s
3(1)
[3] AAT Act, s
40(1C)
[4] [1997] FCA
1504
[5] A subpoena
duces tecum “A process by which the court, at the instances of a
party, commands a witness who has in his possession or control some document
or
paper that is pertinent to the issues of a pending controversy, to produce it at
the trial.”: Black’s Law Dictionary
with pronunciations,
5th edition, 1989, West Publishing Company, St Paul. A
subpoena requiring a person to give evidence was known as a subpoena ad
testificandum.
[6]
Re Becker and Minister for Immigration and Ethnic Affairs [1977] AATA 12;
(1977) 1 ALD 158; 15 ALR 696; at 161; 699 quoted with approval in Wilson v
Minister for Aboriginal and Torres Strait Islander Affairs [1996] HCA 18;
(1996) 189 CLR 1 at 18 per Brennan CJ, Dawson, Toohey, McHugh and Gummow
JJ
[7] Apart from the
summons power, the Tribunal has, for example, been given the power to take
evidence on oath: AAT Act, ss 40(1)(a)
and
(2).
[8] [2009] AATA
988; (2009) 51 AAR 1; 114 ALD
289
[9] [2009] AATA
988; (2009) 51 AAR 1; 114 ALD 289 at [205]- [219]; 72-77;
354-359
[10] [2009]
AATA 988; (2009) 51 AAR 1; 114 ALD 289 at [221]- [245]; 77-84;
359-366
[11]
Waind v Hill and National Employers’ Mutual General Association Ltd
[1978] 1 NSWLR 372 at 385 per Moffitt P and approved by the New South Wales
Court of Appeal in Witness v Marsden [2000] NSWCA 52; 49 NSWLR 429 at
[51]; 440
per Heydon JA, with whom Mason P and Priestley JA agreed
[12] The IPPs are
set out in s 14 of the Privacy Act
1988
[13] Re
Trade Practices Commission v Kimberley Homes Pty Limited [1989] FCA 262 at
[11] per Hill
J
[14] [1984] 3
NSWLR 98
[15]
[1984] 3 NSWLR 98 at 100-101; citations
omitted
[16] (1989)
21 FCR 306; 88 ALR 90 at 102 (part of passage noted as omitted from authorised
report: (1989) 21 FCR 306 at
315)
[17] [2005]
FCA 1279; 225 ALR 760 at [33]; 771 to
772
[18] [2009] FCA
1203 at [20]
[19]
AAT Act, s
40(1A)
[20] AAT
Act, s 40(7)
[21]
Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[22] (1989) 21 FCR
306; 88 ALR 90
[23] (1989) 21 FCR
306; 88 ALR 90 at 102-103 (part of passage noted as omitted from authorised
report: (1989) 21 FCR 306 at
315)
[24] Trade
Practices Commission v Kimberley Homes Pty Ltd (1989) 217 ALR 110 at 116 per
Hill J
[25] [1979] AATA 179; (1979)
2 ALD 60; 24 ALR 577 at 68;
589
[26] (1978) 20
ALR 323; 1 ALD
383
[27] (1978) 20
ALR 323; 1 ALD 383 at 342-343,
402-403
[28] (1952)
72 WN(NSW) 250
[29]
(1952) 72 WN(NSW) 250 at
254
[30] (1985) 40
SASR 489
[31]
(1985) 40 SASR 489 at
493
[32] Bankruptcy
Act, ss 44(1)(a) and
(c)
[33] Bankruptcy
Act, s 43(2)
[34]
Bankruptcy Act, s 43(2)(a) and
(b)
[35] Documents
lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T
documents) at 163,
938
[36] T
documents at
20
[37]
Bankruptcy Regulations 1996, r 13.07(1) and
(2)
[38] Bankruptcy
Act, s 149C(1)
[39]
Bankruptcy Act, ss 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or
(ma). These grounds are described as special grounds in s 149N(1A), which
relates to decisions that this Tribunal may make when reviewing a decision made
by the Inspector-General regarding an
objection.
[40]
Bankruptcy Act, s 149D(1)(i) and see T documents at
738-739
[41] T
documents at
738
[42] T
documents at
766-770
[43]
Corporations Act, s
206A(1A)
[44]
Corporations Act, s
206A(1B)
[45]
Corporations Act, ss
206F(1)-(4)
[46]
Corporations Act, ss 206G(1) and
(3)
[47] T
documents at
769
[48] T
documents at
768
[49] Bankruptcy
Act, s
149K(1)(a)
[50]
Bankruptcy Act, s
149K(2)
[51]
Bankruptcy Act, s
149K(1)(b)
[52]
Bankruptcy Act, s
149K(3)(a)
[53]
Bankruptcy Act, s
149K(3)(b)
[54]
Bankruptcy Act, s
149K(4)
[55]
Bankruptcy Act, s
149K(5)
[56] T
documents at
758-763
[57] T
documents at
820-829
[58] T
documents at
835-892
[59]
Respondent’s Statement of Facts, Reasons and Contentions at
[23]
[60] T
documents at 3
[61]
Bankruptcy Act, s
149N(3)
[62]
Bankruptcy Act, s 149N(2)(a) and
(b)
[63] T
documents at 3
[64]
T documents at
3
[65]
(1998) 82 FCR 468; 153 ALR 327;
55 ALD 358; Burchett, Lehane and Finkelstein
JJ
[66] (1998) 82
FCR 468; 153 ALR 327; 55 ALD 358; 153 ALR 327 at 473; 332; 363
[67] (1998) 82 FCR
468; 153 ALR 327; 55 ALD 358; 153 ALR 327 at 471; 330;
361
[68] (1998) 82
FCR 468; 153 ALR 327; 55 ALD 358; 153 ALR 327 at 471; 330;
361
[69] Bankruptcy
Act, s 149N(2)(a)
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