Phillips v Inspector-General in Bankruptcy

REASONS FOR JUDGMENT 1 This decision relates to an appeal brought by the applicant, Mr Steve Phillips, from a decision of the Administrative Appeals Tribunal ('AAT') dated 13 November 2012. 2 Mr Phillips filed his appeal from the decision of the AAT on 10 December 2012. When this proceeding was before me for directions on 31 May 2013, the respondent, the Inspector-General in Bankruptcy, submitted that Mr Phillips' notice of appeal should be struck out, and that his appeal from the AAT decision should be dismissed. Mr Phillips had been given notice of this application and the written submissions in support thereof before the directions hearing on 31 May 2013. Rather than determining the matter on that date, upon request by Mr Phillips I gave the parties an additional week to continue discussions amongst themselves with a view to resolving the proceeding. I understand that no such resolution has been achieved. During the directions hearing on 31 May 2013, I expressly foreshadowed my tentative view that if the parties were unable to resolve the matters as between themselves prior to 7 June 2013, I would grant the relief sought by the Inspector-General. 3 Since the hearing on 31 May 2013, Mr Phillips (on 4 June 2013) filed a "Statement of Fact/Submission to Fedral [sic] Court of Appeal". This document rehearses much of the material previously filed by Mr Phillips and does not progress his entitlement to relief in this Court any further. The document seeks to raise a number of purported legal grounds, and seeks to "compromise" the proceeding on the basis that the relief he seeks be granted. As will be explained later in these reasons for judgment, the "further" grounds raised by Mr Phillips in [29] to [43] of the document filed on 4 June 2013 do not overcome the inadequacies of the notice of appeal. 4 I decline to grant the relief sought by Mr Phillips, and accede to the application by the Inspector-General to dismiss the notice of appeal. My reasons are as follows. 5 By way of background, Mr Phillips was made bankrupt on 28 August 2006. He filed his Statement of Affairs on 27 September 2006. 6 Absent any objection to discharge being filed, Mr Phillips' bankruptcy would have been discharged by force of s 149 of the Bankruptcy Act 1966 (Cth) ('the Act') at the end of the three year period from the date on which Mr Phillips filed his Statement of Affairs (the end date of such period being 27 September 2009). 7 However, a notice of objection was filed by Mr Phillips' Trustees in Bankruptcy ('Trustees') on 4 September 2009. This notice of objection relied on ss 149D(1)(b) ("after the date of the bankruptcy, the bankrupt contravened section 206A of the Corporations Act 2001 (disqualification from managing corporations)") and 149D(1)(da) ("after the date of the bankruptcy, the bankrupt intentionally provided false or misleading information to the trustee") of the Act. Section 149D(1)(da) constituted a special ground of objection under s 149N of the Act. The effect of the Trustees' notice of objection was to extend the period of Mr Phillips' bankruptcy from three years to eight years, thereby extending the date on which Mr Phillips would be discharged from bankruptcy to 28 September 2014. 8 On 21 January 2010, the Inspector-General confirmed the Trustees' objection under s 149D(1)(b), but cancelled the other grounds of objection taken by the Trustees. The effect of this decision was that Mr Phillips would be discharged from bankruptcy on 28 September 2011. 9 On 29 March 2010, the Trustees issued income assessments to Mr Phillips in respect of three Contribution Assessment Periods. 10 On 17 April 2010, the Trustees filed a further notice of objection to Mr Phillips' discharge from bankruptcy, relying on s 149D(1)(f) of the Act ("the bankrupt failed to pay to the trustee an amount that the bankrupt was liable to pay under section 139ZG"). The effect of this decision was to extend the date on which Mr Phillips was to be discharged from bankruptcy from 28 September 2011 to 28 September 2014. The Inspector-General was subsequently deemed to have confirmed the Trustees' objection on this ground pursuant to s 149P(6) of the Act. 11 On 13 November 2012, the AAT delivered reasons for decision in relation to two applications for review filed by Mr Phillips, being: (a) an application to review the decision of the Inspector-General dated 21 January 2010 confirming the decision by the Trustees dated 4 September 2009 to file a notice of objection to Mr Phillips' discharge from bankruptcy; and (b) an application to review the decision of the Inspector-General in relation to: (i) income assessments issued to Mr Phillips on 29 March 2010; and (ii) the Trustees' notice of objection to the discharge of Mr Phillips' bankruptcy dated 17 April 2010 (which, it will be recalled, was based on s 149D(1)(f) of the Act). 12 Relevantly, the AAT: (a) affirmed the decision by the Inspector-General dated 21 January 2010; and (b) cancelled the Trustees' objection under s 149D(1)(f) of the Act and remitted the contribution assessments to the Trustees. 13 The AAT's decision had the effect of discharging Mr Phillips' bankruptcy as of 13 November 2012, as: (a) the decision by the Inspector-General dated 21 January 2010 meant that Mr Phillips would have been discharged from bankruptcy on 28 September 2011; and (b) the other grounds of objection were cancelled by the AAT and therefore Mr Phillips' bankruptcy ended as at the date of the decision of the AAT (in accordance with ss 149A(3) and 149N(2) of the Act). 14 Following the AAT's decision, the Trustees issued a revised income assessment to Mr Phillips on 7 February 2013. 15 Mr Phillips filed a notice of appeal with this Court on 10 December 2012, purporting to appeal against the whole of the decision of the AAT. The notice of appeal lists 19 "questions of law" purportedly "raised on this appeal". 16 As has previously been the subject of discussion with the parties to this proceeding, the fundamental problem confronted by Mr Phillips' notice of appeal in the form in which it was filed is that this Court has a limited role on appeal from decisions of the AAT. 17 It is appropriate that I briefly summarise the role of the Court in proceedings of this nature before dealing further with Mr Phillips' notice of appeal. 18 Section 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ('AAT Act') provides that a party may appeal to the Federal Court of Australia on a question of law from a decision of the AAT. Division 33.2 of Pt 33 of the Federal Court Rules 2011 (Cth) regulates the practice and procedure to be followed in such appeals to this Court. 19 Numerous cases have considered the nature of such an appeal. In Comcare v Etheridge (2006) 149 FCR 522 at 527, Branson J (with whom Spender and Nicholson JJ agreed) confirmed that an appeal under s 44(1) "on a question of law" is narrower than an appeal that merely involves a question of law. Therefore, a question of law is both a qualifying condition to ground the appeal and the subject matter of such an appeal under s 44(1) of the AAT Act (see Comcare (2006) 149 FCR 522 at 527, citing with approval the observations of Gummow J in TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 at 178). Unlike an appeal from a decision of a judicial body under s 24 of the Federal Court of Australia Act 1976 (Cth), an appeal under s 44(1) of the AAT Act is not by way of rehearing. 20 The Court's power to review factual findings of the AAT is, therefore, limited. Although s 44(7)-(10) of the AAT Act does confer limited power on the Court to make findings of fact in an appeal of this kind, such findings of fact cannot be inconsistent with the findings made by the AAT (other than those made as a result of an error of law on the part of the AAT), and are subject to a number of other conditions articulated in the legislation. The Full Court noted in Comcare (2006) 149 FCR 522 at 527 that this is a power available to be exercised: after the court has given consideration to the questions of law which constitute the subject matter of the appeal. If the answers to those questions, or any of them, lead to relief being granted to the applicant, the limited power to find facts which is vested in the court by s 44(7) may be exercised, where it is convenient to do so having regard to the factors identified in the subsection, to avoid the need for the matter to be remitted to the tribunal for further consideration. 21 This is consistent with the general observations made by the Full Court in Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 286-287, where it was said about the jurisdiction of this Court under s 44(1) of the AAT Act that: [t]he limitation of the jurisdiction to the resolution of questions of law imposes a significant constraint upon the role of the court in reviewing decisions of the tribunal. The appealable error of law must arise on the facts found by the tribunal or must vitiate the findings made or must have led the tribunal to omit to make a finding it was legally required to make. A wrong finding of fact is not sufficient to demonstrate error of law: Waterford v Commonwealth (1987)163 CLR 54 at 77-8; 71 ALR 673. Where the decision of the tribunal involves matters of fact and degree, then provided it applies correct principles of law, no appeal will lie: FCT v Brixius (1987) 16 FCR 359 at 365. The limits within which the jurisdiction is conferred require that it be exercised with restraint. Only in exceptional circumstances should the decision of the tribunal not be the final decision: Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (1980) 47 FLR 131 at 145 (Fisher J); FCT v Cainero 88 ATC 4427 (Foster J). As the Full Court said in Repatriation Commission v Thompson (1988) 82 ALR 352 at 357: … the nature of the task of this court is clear. It is to leave to the tribunal of fact decisions as to the facts and to interfere only when the identified error is one of law. 22 The Court in that case noted that in discharging its function on appeal from a decision of the AAT, the Court "will not be concerned with looseness in the language of the tribunal nor with unhappy phrasing of the tribunal's thoughts", and nor will the reasons for the decision under review be "construed minutely and finely with an eye keenly attuned to the perception of error" (at 287, citing relevant authorities). The Court must avoid an "overly pernickety examination" of the AAT's reasons on appeal (see Roncevich v Repatriation Commission (2005) 222 CLR 115 at 136 per Kirby J). 23 Therefore, an appeal from a decision of the AAT under s 44(1) of the AAT Act must be on a question of law, properly articulated. The Full Court noted in Federal Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd (2010) 186 FCR 410 at 44 that what is "on a question of law" for the purposes of this section has been analysed in many cases, and includes: 1. whether the AAT has identified the relevant legal test: Scicluna at [68] and Collins v Administrative Appeals Tribunal (2007) 163 FCR 35; [2007] FCAFC 111 at [55] (Collins); 2. whether the AAT has applied the correct test: Repatriation Commission v Hill (2002) 69 ALD 581; [2002] FCAFC 192 at [59]; Commissioner of Taxation v Zoffanies Pty Ltd (2003) 132 FCR 523; [2003] FCAFC 236 at [25]; Tax Agents' Board v Bray (2004) 58 ATR 118; [2004] FCA 1620 at [19]; Collins at [55]; 3. whether there is any evidence to support a finding of a particular fact: Minister for Immigration and Multicultural Affairs v Al Miahi (2001) 65 ALD 141; [2001] FCA 744 at [34]; and 4. whether facts found fall within a statute properly construed: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287; 115 ALR 1 at 9. 24 It is also appropriate to note the comments of Allsop J (as he then was; and with whom Lindgren and Emmett JJ agreed) in Collins v Administrative Appeals Tribunal (2007) 163 FCR 35 at 49 (cited with approval by the Court in Trail Bros (2010) 186 FCR 410 at 415) to the effect that none of the cases that is directed at the need for a properly framed question of law to found the statutory jurisdiction of the Court under s 44(1) of the AAT Act (such as Comcare (2006) 149 FCR 522) "limits the reach of s 44 to questions of law divorced from the need to look at facts". Rather, his Honour considered that such cases were dealing with: what has become an endemic problem in the failure of applicants in appeals under s 44 to frame the question as a question of law, including, but not limited to, the practice of raising of factual issues or simply expressing subject matter to set the outer limits of debate before the Court. 25 To this end, I note that if a question in a notice of appeal is not properly a question of law, "no amount of formulary like "erred in law" or "was open as a matter of law" can make it into a question of law" (Australian Telecommunications Corp v Lambroglou (1990) 12 AAR 515 at 527, cited with approval in Comcare (2006) 149 FCR 522 at 527). A mixed question of fact and law is not a question of law within the meaning of s 44(1) of the AAT Act (Comcare (2006) 149 FCR 522 at 527). 26 This brings us to the notice of appeal filed by Mr Phillips in this proceeding. 27 The Inspector-General submitted that notwithstanding the fact that courts should not ignore a question of law due to its deficient articulation by an unrepresented litigant (in this regard relying upon Hoe v Manningham City Council [2011] VSC 37), it is not possible, even on a generous reading of Mr Phillips' notice of appeal, to identify any question of law capable of properly grounding an appeal to this Court from the decision of the AAT. 28 I accept this submission. Despite listing a number of issues that are described as "questions of law", I find that the notice of appeal does not disclose any question of law that can properly found an appeal to this Court from the decision of the AAT. The notice contains a series of assertions, allegations and topic headings, the relevance of which to an appeal under s 44(1) of the AAT Act is not readily apparent. Rather, Mr Phillips' purported questions of law and the stated grounds for appeal appear to be directed at ventilating complaints about, and disputes with, his Trustees and various other parties. On this basis, it is appropriate that the notice of appeal be struck out, and the proceeding be dismissed. 29 The document filed on 4 June 2013 by Mr Phillips does not change my conclusion in this regard. Each of the 'further grounds' raised in [29] to [43] of that document are general in nature and do not constitute or raise one or more questions of law as required in an appeal of this kind. The facts relied upon, as I have indicated, do not go beyond Mr Phillips' previous contentions other than asserting that on 31 May 2013, the Inspector-General confirmed that the discharge date of Mr Phillips' bankruptcy was 28 September 2013. A copy of a letter sent to Mr Phillips by the solicitors for the Inspector-General on 31 May 2013 has been provided to the Court. The confirmation was in fact that Mr Phillips was discharged from bankruptcy on 13 November 2012 (the date of the AAT's decision). That letter enclosed an extract from the National Personal Insolvency Index to this effect. 30 The Inspector-General also submitted that even if the notice of appeal were viable and did disclose proper grounds on which to base an appeal to this Court, the relief apparently sought by Mr Phillips in this proceeding is not available. In submissions that were both filed with the Court and provided to Mr Phillips prior to the directions hearing on 31 May 2013, the Inspector-General suggested that it may be inferred that Mr Phillips purports to appeal from the decision of the AAT by seeking: (a) to argue that the Inspector-General's decision of 21 January 2010 was erroneous and that Mr Phillips should have been discharged from bankruptcy on or around 28 September 2009; and (b) to challenge the quantum of his income assessment as determined by his Trustees, which determination was remitted to the Trustees by the AAT. 31 In relation to the first matter it was submitted that even if the AAT had set aside the Inspector-General's decision, the effect of doing so would have been such that Mr Phillips' bankruptcy would have ended as at the date of the decision of the AAT (pursuant to ss 149A(3) and 149N(2) of the Act). Further, it was submitted that there is no provision in the Act for the AAT to retrospectively discharge or terminate a bankruptcy such that Mr Phillips' bankruptcy would be deemed to have ended on 21 September 2009. I agree with this submission. 32 In respect of the second matter, the Inspector-General submitted that pursuant to s 139WA of the Act, Mr Phillips' Trustees were empowered to issue a fresh notice of assessment in respect of Mr Phillips' income and contribution at any time, including after he was discharged from bankruptcy. As already noted, following the AAT's decision in November 2012, Mr Phillips' Trustees did exactly that. 33 The Inspector-General further submitted that it has not been identified how this Court, in considering an appeal on a question of law, has the power to disturb the Trustees' calculation of Mr Phillips' income contribution liability. Further, the Inspector-General noted that no request for a review under s 139ZA of the Act has been made by Mr Phillips in respect of the Trustees' decision of 7 February 2013. Nor am I aware of any application for review of this decision having been lodged by Mr Phillips directly with the AAT, or any application seeking to review this decision in this Court under any other provision of the Act. Accordingly, it was submitted that the Trustees' assessment dated 7 February 2013 remains the operative determination. 34 There is some force in this submission. There is simply no application before this Court concerning the Trustees' assessment dated 7 February 2013. In these circumstances, I do not need to enter into the debate concerning the power of the Court to grant the relief sought by Mr Phillips (see eg Re Ellis; Ex parte Jefferson (Unreported, Federal Court of Australia, Drummond J, 17 February 1995), Re Ansett; Ex parte Ansett v Pattison (1995) 56 FCR 526 and Skalkos v Nicols (2009) 175 FCR 547). 35 Before concluding, I note that Mr Phillips has received some legal advice during the course of this proceeding pursuant to the Court's Pro Bono Legal Assistance scheme. Further, after discussing the matter with him in open court on several occasions, I am satisfied that he both understood the nature of this Court's appellate jurisdiction in the circumstances, and was given ample opportunity to reformulate, amplify or amend his grounds of appeal as set out in the notice of appeal filed on 10 December 2012. He chose not to do so. 36 Accordingly, I order that the notice of appeal be dismissed. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.