Trkulja v Administrative Appeals Tribunal

REASONS FOR JUDGMENT Background 1 The appellant in this matter, Mr Trkulja, appeals against certain findings made by the Administrative Appeals Tribunal ('AAT') in a decision made on 26 July 2005. 2 The appellant was made bankrupt on 4 September 2000 pursuant to a debtor's petition. Mr Morton, who is not a party to these proceedings, was appointed trustee ('the trustee'). The trustee, by a notice dated 24 January 2003, objected to the discharge of Mr Trkulja from bankruptcy pursuant to ss 149D(1)(d), 149D(1)(n) and 149(1)(b) of the Bankruptcy Act 1966 (Cth) ('the Act'). In a further notice dated 3 September 2003, the trustee objected to the discharge of Mr Trkulja from bankruptcy pursuant to ss 149D(1)(c), 149D(1)(b) and 149D(1)(f) of the Act. The trustee also issued an income contribution assessment in relation to the appellant for the period 4 September 2000 to 3 September 2001. 3 The second respondent in two decisions dated 16 September 2003 and 24 October 2003 ('the objection decisions'), affirmed the decision of the trustee to file the notices of objection. However, having reviewed the income contribution assessment of the trustee, the second respondent issued a fresh income contribution assessment ('the income contribution decision'). 4 The AAT varied the objection decisions of the second respondent by setting aside those parts of the second respondent's decisions which affirmed the grounds of objection to discharge under ss 149D(1)(n), 149(1)(b) and 149(1)(f). In all other respects, the second respondent's decisions, including the income contribution decision, were affirmed by the AAT. 5 The appellant, who was not legally represented, alleged that there were two errors of law by the AAT, namely: (a) the AAT's finding that the appellant's 'income and contribution could be assessed under section 139ZD(b) of the Bankrupcy Act 1966 (Cth) based on an understanding that there was little or no change in the [appellant's] circumstances between March and May 2000 and September 2001'; and (b) 'that the Tribunal erred in law by incorrectly deciding that the [appellant's decision] under section 149D(1)(d) of the Bankruptcy Act 1966 (Cth) [was] based on the hearsay evidence [and was] Without Legal Proof.' The first ground 6 The first ground of appeal concerns the AAT's affirmation of the income contribution assessment decision of the second respondent. In his notice of appeal, the appellant made the following allegations in relation to this ground of appeal: (a) 'there was no evidence or other material to support the Tribunal's decision that the income derived by the applicant between 4 September 2000 and 3 September 2001 was in the sum of $58,500.00'; and (b) 'the Tribunal took into account the irrelevant consideration that the applicant's stated income in a credit card application to Citibank dated 15 March 2000 was in the sum of $58,500.00.' 7 The jurisdiction of this Court to review a decision of the AAT is confined by the terms of s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) which confines an appeal to 'a question of law'. In Neal v Secretary, Department of Transport (1980) 29 ALR 350 at 354, Franki J stated that: 'There is no appeal to this court on anything other than a question of law and therefore the court is not concerned with whether or not it would have come to the same conclusion as the Tribunal came to, but only with the question of whether the Tribunal erred in law.' 8 In Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 286, the Full Court stated: 'The 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'. (citation omitted) 9 The errors of law alleged are that the AAT took into account irrelevant considerations and that there was no evidence upon which it could reach the conclusion that it did. Mason J in Peko-Wallsend Ltd (1996) 162 CLR 24 at 40 ('Peko') explained the concept of relevant and irrelevant considerations as it applies to statutory decision-makers as follows: 'In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken in to account in the exercise of that discretion are similarly unconfined, except in so far as there may be some implied limitation on the factors to which the decision-maker may legitimately have regard. By analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject-matter, scope and purpose of the Act.' (citations omitted) 10 Contrary to the appellant's contention, there was evidence 'to support the Tribunal's decision that the income derived by the applicant between 4 September 2000 and 3 September 2001 was in the sum of $58,500.00' being the statement of income to that effect made by the appellant on a credit card application dated 5 March 2000. 11 On this point, the AAT said, inter alia: 'Given the lack of information and evidence available to the Tribunal in seeking to calculate the likely income of Mr Trkulja in the period 4 September 2000 to 3 September 2001, it is virtually impossible to do so. Given the history of Mr Trkulja in failing to provide information, failing to maintain financial records, his evasiveness, and, at times, contradictions when under examination and speaking in generalities rather than specifics at the hearing, his evidence cannot be accepted. I am satisfied that his income in the relevant period was in excess of that claimed by him to be income in his statement filed with the trustee and the respondent. On the other hand, I am satisfied that the trustee's assessment, on the basis on which it was calculated, was excessive. I am inclined to agree with the respondent that, if anything, the respondent's assessment was likely to have been low. Nevertheless, the respondent's assessment was based on a signed application for credit by Mr Trkulja, albeit at a time prior to his bankruptcy and the commencement of the contribution assessment period. I acknowledge that, pursuant to s 139X of the Act, the trustee may disregard information provided by the bankrupt and make an assessment on the basis of what the trustee consider to be the correct information where he considers the information provided by the bankrupt is or may be incorrect. However, I do not believe that this empowers the trustee to simply add up the total expenditure of the bankrupt during the period and assume that it represented income. Given the circumstances of this case, I am of the view that the respondent's assessment should be affirmed on the basis that there was little or no change in Mr Trkulja's circumstances between March and May 2000 and September 2001. Consequently, the decision in relation to the income contribution assessment should be affirmed.' 12 It was open to the AAT to determine that there was no relevant change to the appellant's circumstances between the date of the application and the relevant period in so far as those circumstances concerned his income. The weight accorded to the evidence before the AAT was a matter for the AAT. 13 Similarly, the stated income of the appellant on a credit card application could not be said to be an irrelevant consideration as described in Peko; rather, it would seem to be directly relevant to the very question before the AAT. In reality, the appellant is seeking to re-litigate facts determined by the AAT. It follows that the appellant fails on this ground of appeal. The second ground 14 The appellant's second ground of appeal concerns the notice of objection filed by the trustee pursuant to s 149D(1)(d) of the Act, which was upheld by the second respondent and the AAT. Section 149D(1) of the Act 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; …' 15 The appellant alleges that in making its finding on this point, the AAT relied upon hearsay evidence. In affirming the second respondent's decision on this ground of objection, the AAT set out a number of paragraphs from the second respondent's statement of facts and contentions filed in the AAT proceeding. However, prior to setting out these paragraphs, the AAT said: 'The background facts leading to the ground of objection pursuant to s 149(D)(1)(d) of the Act were conveniently summarised in the respondent's statement of facts and contentions. The supporting documentation was provided to the Tribunal.' 16 The appellant's notice of appeal appears to have been drawn on the basis of the mistaken belief that the AAT made its finding on the s 149D(1)(d) objection without considering the evidence before it. It is clear that the AAT had before it, and based its decision on the s 149D(1)(d) objection upon documentation and direct documentary evidence relevant to that issue. The AAT was not bound by the rules of evidence (see s 33(1)(c) of the Administrative Appeals Tribunal Act 1975 (Cth)) and was entitled to act on the material before it, including hearsay evidence. 17 On the substantive aspect of the objection, being the failure of Mr Trkulja to provide written information about his property and income on request from the trustee, the AAT said: 'Mr Trkulja maintained that his reason for the failure to comply was that his computer and records had been seized by the trustee and he no longer possessed the required information. However, the evidence showed that the trustee believed that the information provided by Mr Trkulja was either incorrect or inadequate. On 12 June 2001 the trustee executed a search warrant issued by the Federal Court of Australia under s 130(2) of the Act. A further search warrant was executed on 15 August 2003. Documents so obtained included banking records and credit card records not previously disclosed by Mr Trkulja and details of business undertakings, particularly in relation to Fox Video. Both search warrants were executed well after Mr Trkulja had been requested in writing for information and had failed to do so. It is clear that his response of 15 March 2001 failed to comply with the requests and was prepared when he had full access to his records. Again, I am satisfied that there is sufficient evidence to support the grounds of objection under s 149D(1)(d) of the Act and that Mr Trkulja has failed to establish that he had a reasonable excuse for failing to comply with the request to provide information.' 18 The findings of the AAT were open on the material before it and the appellant has not established any error of law, or any other error, on the part of the AAT in relation to the s 149D(1)(d) objection. Accordingly, it must follow that this ground of appeal also fails. 19 The appellant has not made out either of the grounds of appeal before this Court. Accordingly, the appeal is to be dismissed with costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.