Aid/Watch Incorporated and Commissioner of Taxation

[2008] AATA 239

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 239

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/1792

TAXATION APPEALS DIVISION  )

Re        AID/WATCH INCORPORATED

Applicant

And      COMMISSIONER OF TAXATION

Respondent

DECISION

TribunalThe Hon Justice Garry Downes, President

Date17 March 2008

PlaceSydney

Decision      1.        Vacate the hearing date today. 

2. Pursuant to ss 34A(1)(b) and 34C(1) of the Administrative Appeals Tribunal Act1975 (Cth), direct that a mediation take place before Senior Member Ettinger of the Tribunal, or, if Senior Member Ettinger is unavailable, before another representative of the Tribunal with skills and knowledge in taxation and mediation.

3.        Direct the filing and service within 21 days of two affidavits by:

(a) The principal solicitor for the applicant, explaining how it was that steps were not taken to instruct senior and junior counsel in sufficient time; and

(b) The principal solicitor for the respondent, explaining why, upon learning of the late filing of the affidavit of Dr James Goodman on 13 March 2008, attention was not given to obtaining all information that was needed to allow the matter to proceed today, and why, if it had been, this matter could not have gone on today.

4.        Fix the hearing of this matter before me on 24 June 2008. 

5.        Liberty to apply.       

...................[sgd].......................

Garry Downes
  President

CATCHWORDS

PRACTICE AND PROCEDURE – application for adjournment – affidavit filed out of time – consent to adjournment – adjournments granted only in exceptional circumstances – adjournment granted

Administrative Appeals Tribunal Act 1975 (Cth)

REASONS FOR DECISION

17 March 2008 The Hon Justice Garry Downes, President

Introduction

1.      Application has been made on behalf of the respondent Commissioner of Taxation for the hearing which has been fixed for today to be vacated.  The basis of the application is that on Thursday last week the applicant, Aid/Watch Incorporated, filed an affidavit which the Commissioner says it could not prepare sufficiently to meet in the intervening time.  I have already told the parties that I will accede to the application, but I do so with considerable reluctance. 

2.      Hearing dates in this Tribunal are intended to be a final communication to the parties of the day on which the Tribunal will make available its resources to determine the proceedings.  In May 2005, the Tribunal adopted an adjournment policy (the Listing and Adjournment Practice Direction) which makes it very clear to the parties that this is so.  In particular, it makes it clear, firstly, that no date for hearing should be accepted by the parties, or their legal advisers, unless they are sure that the matter will be ready for hearing on the day fixed and, secondly, that applications for adjournment will be unlikely to succeed when based on some problem in the preparation of the proceedings for hearing.

3.      This case does involve some complicated issues of law, but it should not involve any particularly complicated issues of fact.  Indeed, it is the sort of case in which one would imagine that a set of agreed facts could be arrived at if the parties turned their attention to that possibility. 

4.      The affidavit which provided the basis for the application for adjournment is an affidavit of Dr James Goodman, who is the chairperson of the Committee of Management of Aid/Watch.  The affidavit is some nine and a half pages long.  On a very superficial examination, it does not appear to obtain much evidence that would require careful examination.  Dr Goodman had already sworn an affidavit in January which contained, no doubt, some of the material which is covered by the later affidavit.  Unsurprisingly, the Commissioner says that it is not so much what is in the later affidavit, but what is not in the affidavit and what it points to, which is the matter of concern.  The Commissioner says that it will be necessary to examine documents that are referred to in the affidavit which the Commissioner does not have. 

5.      This matter was the subject of directions on three occasions, the first being 5 July 2007, the second 20 July 2007 and the third 14 September 2007.  Directions were made relating to the filing of evidence.  The directions were clear in their terms.  Unfortunately, subsequent events, particularly the filing of the affidavit of Dr Goodman, show that the directions were not adhered to. 

6.      The reason for the directions not being adhered to is one which one encounters not infrequently, namely, that when counsel, including senior counsel, were engaged to appear in the matter, advice was given that the further affidavit needed to be filed.  Such events are matters with which I do have some sympathy.  In 35 years at the Bar it would not be true to say that I did not, on some occasions, advise solicitors to do things at the last minute when it seemed to me that they were necessary.  To say that sometimes it happens does not excuse the underlying failure to avoid this kind of problem.  Solicitors should do their best to anticipate whether something more might be required and, in that event, to retain counsel in a timely fashion to ensure that anything that is required to be done is done in time. 

7.      I think it is an appropriate course in this case that I should direct the principal solicitor handling the matter on behalf of the applicant, within 21 days, to file and serve an affidavit explaining how it was that steps were not taken to instruct senior and junior counsel in sufficient time. 

8.      I would ask the deponent of the affidavit to bear in mind that a frank affidavit will be much more appreciated by the Tribunal than one which seeks to find reasons associated with things like pressure of work.  An affidavit which frankly accepts that there was a problem, if that is the fact, is one which will be more appreciated by the Tribunal.  That is not to say that there may not be some complete explanation of the problem - and I keep an entirely open mind about that – and will draw no inferences adverse to anybody. 

9.      I also wish to make it very clear that when this matter is heard, none of the issues that I am addressing at the moment will have any relevance whatsoever to the hearing and disposition of the matter. 

10.     Late filing of affidavits is not, regrettably, unusual.  In many cases, a little effort on the part of the other party, sometimes accepting the idea that “there, but for the grace of God, go I”, can avoid adjournments that might otherwise be necessary.  In the present case it is not immediately apparent to me why, if the respondent had devoted attention to getting the information it said it needed, rather than discussing the need for an adjournment on Friday, this matter could not have proceeded today. 

11.     Before me it has been said that summonses will be needed to be issued.  That might be so in the ordinary case, but to the extent to which the material is in the hands of the applicant, Aid/Watch, where I suspect most if not all of it is, I should have thought that if the Commissioner’s counsel had said to Aid/Watch’s counsel: “We want the following material within a matter of an hour or so”, every effort would have been expended towards achieving that result.  As I said to counsel at the beginning of this case, I know of massive cases that have been prepared from start to finish, often in the area of corporations law and takeovers and the like, within the space that was available here. 

12.     I accordingly propose also to give a direction that, within 21 days, the principal solicitor handling the matter for the respondent file and serve an affidavit explaining why some such approach as I have described was not attempted and why, if it had been, this matter could not have gone on today. 

13.     The matter will need to be adjourned and I propose to adjourn it for hearing before me on Tuesday, 24 June on the basis that the parties consider that the case will finish on that day, but that if it does not, it will continue on Wednesday, 25 June. 

14.     There is accordingly a substantial period of time between now and the time when the matter comes on for further hearing.  It seems to me that this will provide a good opportunity for the parties to see if the disputes between them can be resolved, or at least reduced, by undertaking a process of mediation.  I believe that Aid/Watch is agreeable to mediation.  The Commissioner, on the other hand, considers that it would be better for it to have an opportunity to examine the material that it now needs to have access to and then to decide whether a mediation is appropriate. 

15. I have power to direct a mediation under ss 34A(1)(b) and 34C(1) of the Administrative Appeals Tribunal Act1975 (Cth) and I propose to direct that a mediation take place before Senior Member Ettinger of the Tribunal, if she is available. The mediation will need to be arranged by the parties through the Registry of the Tribunal and if Senior Member Ettinger is not available, some other Tribunal representative with knowledge and skills in taxation and mediation will be found.

16.     It would be, as it always is, a good outcome in this case if the mediation is able to resolve the matter, but even if it is not able to resolve the matter, it should enable the parties to have a clear understanding of what the other side says.  This is not litigation, but administrative review and, more importantly, the respondent now has a statutory obligation to assist the Tribunal in resolving the matter pursuant to s 33(1AA) of the Act.  Accordingly, I think it would be most appropriate if in the mediation the parties candidly put forward their views about the case and, for example, if there was some basis upon which the Commissioner might become satisfied, which only required some slight amendment to the constitution or objects of Aid/Watch, that those sorts of things could be discussed. 

17.     I mentioned at the outset the possibility of this case proceeding on agreed facts.  It seems to me that if all else fails in the mediation, seeing whether some agreed facts could be arrived at so that the facts do not have to emerge from, for example, cross-examination of Dr Goodman in the hearing, would be a satisfactory – although not fully satisfactory – result of the mediation.  For all those reasons:

1.        I vacate the hearing date today. 

2.        I direct a mediation take place. 

3.        I direct the filing and service of the two affidavits that I have mentioned. 

4.        I fix the hearing of this matter before me on 24 June next. 

5.        I reserve liberty to apply. 

I certify that the seventeen (17) preceding paragraphs are a true copy of the reasons for the decision herein of Justice Downes, President.

Signed:   ..........................[sgd]................................................
               Gregory Cooper, Associate

Date of Hearing:  17 March 2008
Date of Decision:  17 March 2008
Solicitor for the Applicant:                  Maurice Blackburn
Counsel for the Applicant:                 D L Williams SC with S Kaur-Bains
Solicitor for the Respondent:             Australian Government Solicitor
Counsel for the Respondent:           M Allars