By Bonnie McMahon a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group
In the recent Administrative Appeals Tribunal (“the Tribunal”) decision of Lavin and Inspector General in Bankruptcy [2016] AATA 798 (“Lavin”), the Inspector-General in Bankruptcy (“Inspector-General”) has successfully argued that the Tribunal does not have the jurisdiction to:
- review a decision of a Trustee in Bankruptcy (“the Trustee”) in relation to an assessment of the bankrupt’s income and contributions, when the Inspector-General refused to conduct a review of the Trustee’s decision under section 139ZA(5) of the Bankruptcy Act 1966 (Cth) (“the Act”): and
- determine that a refusal made by the Inspector-General to conduct a review of the Trustee’s decision under section 139ZA(5), is as a matter of fact a different decision or decisions than that stated by the Inspector-General.
The Applicant in Lavin was a bankrupt seeking a review of the decision her Trustee had made, in relation to her income and contributions under section 139Y of the Act. The Applicant had previously sought an internal review of the Trustee’s decision by the Inspector-General. The Inspector-General had refused to undertake this review under section 139ZA(5), and as a result the Applicant had applied to the Tribunal seeking a review of the Inspector-General’s decision under section 139ZF(b).
It was at this point that an issue arose as to the jurisdiction of the Tribunal. The Applicant raised two issues that she wanted the Tribunal to consider, in addition to their initial request for a review of the Inspector-General’s decision.
The first issue was that the Applicant wanted the Tribunal to review, not only the Inspector-General’s decision, but also the Trustee’s initial decision. The Inspector-General argued that the Tribunal does not have the jurisdiction under section 139ZF to review the Trustee’s decision, rather the Tribunal’s jurisdiction only extends to conducting a review of the Inspector-General’s decision to not conduct a review.
The second issue involved the Applicant wishing to argue that the decision made by the Inspector-General, which on its face a refusal to undertake a review, was in fact nevertheless actually a review. The Inspector-General argued that the Tribunal did not have this power to declare that the decision was something completely different to what it said, and that this would be the exercised of declaratory power, which the AAT does not have. Instead, the Inspector-General said, the Tribunal must take the decision on its face, as a decision to refuse to conduct a review.
Ultimately the Tribunal found in favour of the Inspector-General on both issues. The Tribunal determined that it did not have the jurisdiction to determine either of the matters requested by the Applicant, as the Applicant had been unable to point to any specific provisions which conferred the jurisdiction on the Tribunal.
Matthews Folbigg represented the Inspector-General in this matter and were able to achieve a successful outcome for their client, on these issues which affect a number of decisions made by trustees every year, and which the Inspector-General is requested to review.
Read the judgment here.(link is external)
If you would like more information or advice in relation to insolvency, restructuring or debt recovery law, contact Bonnie McMahon or a Principal of the Matthews Folbigg Insolvency, Restructuring & Debt Recovery Group:
Jeffrey Brown on (02) 9806 7446 or jeffreyb@matthewsfolbigg.com.au
Stephen Mullette on (02) 9806 7459 or stephenm@matthewsfolbigg.com.au.
