Ball, Maxwell Thomas v Commissioner of Taxation of the Commonwealth of Australia
[1996] FCA 528
•28 Jun 1996
NOT FOR DISTRIBUTION
CATCHWORDS
ADMINISTRATIVE LAW - Appeal from Administrative Appeals Tribunal - procedural fairness - unrepresented applicants before Tribunal - whether procedural fairness required Tribunal to suggest to litigants in person possibility of application for adjournment - Tribunal's discretion to grant adjournment.
PRACTICE AND PROCEDURE - unrepresented litigants before Administrative Appeals Tribunal - failure to comply with procedural requirements - circumstances in which court or tribunal might inquire as to reason for failure to comply - whether procedural fairness required Tribunal to suggest to litigants in person possibility of application for adjournment - discretion to grant adjournment.
Administrative Appeals Tribunal Act 1975 s 44
Titan v Babic (1994) 49 FCR 546
MAXWELL THOMAS BALL and PATRICIA MARION BALL v COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
No NG 131 of 1995
Lindgren J
Sydney
28 June 1996
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 131 of 1995
GENERAL DIVISION )
On appeal from the Taxation Appeals Division of the
Administrative Appeals Tribunal
BETWEEN:
MAXWELL THOMAS BALL and PATRICIA MARION BALL
Applicants
AND:
COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Respondent
CORAM:Lindgren J
PLACE:Sydney
DATE:28 June 1996
MINUTE OF ORDERS
THE COURT ORDERS THAT:
The appeal be dismissed.
The applicants pay the costs of the respondent of the appeal.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 131 of 1995
GENERAL DIVISION )
On appeal from the Taxation Appeals Division of the
Administrative Appeals Tribunal
BETWEEN:
MAXWELL THOMAS BALL and PATRICIA MARION BALL
Applicants
AND:
COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Respondent
CORAM:Lindgren J
PLACE:Sydney
DATE:28 June 1996
REASONS FOR JUDGMENT
INTRODUCTION:
The applicants appeal pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act") from a decision of the Administrative Appeals Tribunal ("AAT") dated 3 February 1995 by which the AAT affirmed objection decisions of the respondent ("the Commissioner") in respect of each applicant. Before the AAT there were two applications, numbers NT 6 of 1994 and NT 7 of 1994, one brought by each applicant, but the applicants have filed a single application in this Court. In respect of each applicant, the Commissioner's objection decisions related to the tax years ended 30 June 1982, 1983, 1984, 1986 and 1987.
The hearing in the AAT which gave rise to the decision appealed from took place on 12 January 1995. On that date the first named applicant ("Mr Ball") appeared in person and as authorised representative of his wife, the second named applicant ("Mrs Ball").
There are ten grounds of appeal to this Court. The first four allege a failure of the AAT to show procedural fairness and the last six allege substantive errors. Mr and Mrs Ball did not make submissions before me in support of the last six grounds. The first four grounds relate to the fact that the applicants were not professionally represented before the AAT. They raise questions about the proper course to be followed by the AAT in relation to a "litigant in person" who does not apply for an adjournment.
BACKGROUND FACTS
Substantive background facts
The case relates to certain land being Portion 85, Evans Street, Westdale in the Parish of Muroon, County of Parry, City of Tamworth containing a total area of about 3.713 hectares ("the Land"). Prior to 2 July 1980, the Land was owned by Mr Ball and he and Mrs Ball resided in a house on it. By a Transfer dated 2 July 1980 and registered on 5 March 1991, Mr Ball transferred the Land to M & P Ball (No 1) Pty Limited ("the Company"). Mr Ball's signature was witnessed by Mr D K L Raphael, solicitor of Parramatta, who accepted the transfer as solicitor for the Company as transferee. The Transfer was a printed form and contained an acknowledgment by Mr Ball as transferor of the consideration for the transfer in the following terms:
" ... hereby acknowledges receipt of the consideration of $ pursuant to an Agreement dated 2nd July, 1980 between Transferor and Transferee."
The words underlined above were typed into the Transfer and those not underlined formed part of the printed form. As can be seen, no amount of money was typed into the Transfer as representing the consideration for the transfer of the Land.
Following the transfer but over a period of some years, the Land was subdivided and the newly created lots were developed and progressively sold. Mr and Mrs Ball continued to reside in the dwelling house which is on Lot 12, one of the lots created by the subdivision.
Apparently Mr and Mrs Ball took the position that from the time of the transfer, the Company held the Land as trustee for them. The Commissioner proceeded accordingly. He treated the proceeds of sales received by the Company as trustee in 1982, 1983, 1984, 1986 and 1987 as income distributed to Mr and Mrs Ball in equal shares. They conceded through their accountant that the proceeds of the sales of subdivided lots were assessable income.
The area of dispute between the parties related to the costs associated with the subdivision and development which should be allowed against that income. A substantial part of the difficulty arose from the fact that two other companies controlled by the applicants and by their sons were involved in the subdivision and development. These companies were Lulworth Investments Pty Limited, of and in which apparently the sons were the directors and shareholders, and Ball Equipment and Leasing Pty Limited, of and in which apparently Mr and Mrs Ball were the directors and shareholders. The documentary evidence suggested that the various costs had been borne by these two companies or by Mr and Mrs Ball rather than by the Company as trustee.
In its Reasons for Decision, the AAT referred to three principal areas of cost which were in dispute: the cost of the Land; the cost of subdividing the Land; and the cost of building a "spec" house on the Land. In relation to the cost of the Land, the Commissioner allowed $36,000. This figure was based on an Australian Valuation Office report of May 1989 which placed a value of $36,000 on the 3.713 hectares and $100,000 on improvements as at 1 July 1980. The Commissioner did not allow any amount for the house in which Mr and Mrs Ball resided, as they continued to live in it and it was not sold. He divided the sum of $36,000 among the newly created vacant lots, and arrived at an amount of $1,200 per lot.
In relation to the cost of subdivision and development, the Commissioner initially allowed $13,967, or $466 per lot. He allowed further amounts of $2020 in 1982, $3030 in 1983, $506 in 1984, $3,215 in 1986, and $4060 in 1987 subsequently.
The Commissioner allowed no amount in respect of the "spec" house that was built on one of the newly created lots, title to which was apparently in the name of Mrs Ball. He took the position that no records had been produced to substantiate the outlay of $35,000 which was claimed as a deduction.
Procedural background facts
The progress of the applications in the AAT leading up to the hearing on 12 January 1995 assumes importance.
The objection decisions of the Commissioner were dated 11 October 1993.
The applications to the AAT for review, one by Mr Ball and one by Mrs Ball, were dated 25 February 1994. The address of Mr and Mrs Ball was stated as "Lulworth Park", 46 Evans Street, Tamworth and the postal address was stated as "C/- Hancock, Woodward & Hollick, PO Box 84, Tamworth NSW 2340." A Mr Peter Lynch, of that firm of chartered accountants, was advising and representing Mr and Mrs Ball in their dealings with the Australian Taxation Office, and was to play an important role in later events.
On 18 May 1994, Mr Lynch wrote to Mr Stephen Catt of the Australian Government Solicitor's office, setting out the issues as perceived by his clients. The letter advised that his clients accepted that the proceeds of sale were assessable and identified the three issues referred to earlier. The letter asserted that the Land had been transferred to the Company "at a value of $220,000."
On 1 July 1994, the Commissioner filed with the AAT his statement of facts, issues and contentions. This included the statement of fact that "the applicants claim that the consideration for the transfer was $220,000". It identified the issues as being whether any outgoings not already allowed as deductions in respect of the transfer of the Land to the Company, the development of the lots and the construction of the "spec" house, had been incurred by the Company as trustee, and if so, whether they were allowable deductions to be taken into account in the determination of the net income of the trust estate distributed to Mr and Mrs Ball in the years of income.
On 4 July 1994, Mr Lynch wrote to the AAT setting out his clients' statement of facts issues and contentions. The letter included the following "fact":
"(5)Development of the land was done by various entities including Lulworth Investments Pty Limited, Ball Equipment
and Leasing Pty Limited and Mr M T Ball. All entities are related."
The letter contended that "from an accounting perspective the whole matter was handled in an untidy manner" and that "it appears all transactions went through one bank account and were then dissected to the various entities". It suggested that "to resolve the matter satisfactorily" it should be looked at on a "global" basis by "trying to reconstruct the overall position ignoring the supposed structure under which the whole matter took place".
On 31 August 1994, in response to telephone calls from the AAT, Mr Lynch telephoned it. The AAT's record of that telephone conversation is as follows:
"Peter Lynch called. His client is going through material given to him following meeting with ATO approx a month ago. (A) has been involved in a Supreme Court matter and is representing self. Mr Lynch advised that he will contact us next week (6 or 7/9) & hopefully with advice from client, whose solicitor is going away for 2 weeks.
I advised Mr Lynch SM, concerned at delay & if no result by next week, may list for DH."
(Apparently "SM" signifies "Senior Member" and "DH" signifies "Directions Hearing".)
On 13 October 1994, Deputy President McMahon of the AAT presided over a "call-over" by telephone. Mr Catt of the Australian Government Solicitor's Office represented the Commissioner and Mr Lynch represented the applicants. Mr Catt gave affidavit evidence to the following effect (in cross examination before me, Mr Lynch said that he did not dispute the accuracy of Mr Catt's account):
"At the beginning of the callover, after appearances were taken, Mr McMahon said words to the following effect -
‘Are the matters ready for hearing?’
Mr Lynch said words to the following effect -
‘If they are not going to be settled then they are ready.’
Mr McMahon said words to the following effect -
‘Mr Lynch, will you be representing the applicants at the hearing?’
Mr Lynch said words to the following effect -
‘No.Mr Ball will appear on his own behalf.’
At this stage there had been no mention of any possible date for hearing. I said words to the following effect -
‘In my opinion the matters are not ready for hearing. I don't have a copy of the applicants' statement of facts, issues and contentions, I don't know who will be called to give evidence, I don't know what the case to answer will be. Applicants running cases for themselves are notoriously difficult to predict and the matters need firm control to be taken by the presiding member, in my opinion before they are set down for hearing.’
Mr McMahon said words to the following effect -
‘I am going to set the matters down for hearing before Mr Barbour. Will they last for one day?’
Mr Lynch said words to the following effect -
‘Yes.’
I said words to the following effect -
‘Mr McMahon, at the moment it is not possible to estimate. As I said I don't know how many witnesses there will be. It is difficult to predict when applicants run cases for themselves.’
Mr McMahon said words to the following effect -
‘Applicants in person are usually briefer than senior counsel. I will fix them for one day on 12 January 1995 before Mr Barbour.’
I said words to the following effect -
‘Mr McMahon, I would prefer to have the matters listed at a later date as many counsel are unavailable in that period.’
Mr McMahon said words to the following effect -
‘There are competent counsel around at that time. You will have to find counsel who is available on that date.’
I said words to the following effect -
‘Yes, Mr McMahon.’
Mr McMahon said words to the following effect -
‘I fix these matters for hearing on 12 January 1995 before Mr Barbour.’" (emphasis supplied)
On 9 November 1994, Senior Member Barbour presided over a "directions hearing" by telephone at which, again, Mr Catt represented the Commissioner and Mr Lynch represented the applicants. Again, Mr Catt gave affidavit evidence of what occurred during the hearing (in cross examination before me Mr Lynch said that he did not dispute the accuracy of the substance of Mr Catt's
account). Paragraph 4 of Mr Catt's affidavit sworn 27 July 1995 was as follows:
"During the directions hearing, but before the directions were made, Mr Barbour said words to the following effect -
‘Mr Lynch, will you be representing Mr Ball at the hearing?’
Mr Lynch said words to the following effect -
‘No. I expect that he will represent himself.’
Mr Barbour said words to the following effect -
‘Mr Ball must understand that the directions I make today apply to him as well as you Mr Lynch. I want to make it clear to you that I do not want any suggestion that Mr Ball is not aware of what has been directed.’
Towards the end of the directions hearing Mr Barbour said words to the following effect -
‘I am concerned about Mr Ball's lack of legal representation; it might present difficulties for him. It is a false economy not to employ a lawyer to represent a party at a hearing such as this. I am concerned to ensure that Mr Ball does not damage his own best interests.’
Mr Lynch said words to the following effect -
‘Mr Ball has recently been conducting some matters in the Supreme Court quite successfully and is not your average Joe Blow off the street.’" (emphasis supplied)
Senior Member Barbour made the following directions:
"(1)All evidence the applicant intends to rely upon at the hearing of this application, and outlines of prospective witness
statements, are to be served and filed no later than 30 November 1994;
(2)All evidence the respondent intends to rely upon at the hearing of this application, and outlines of prospective witness statements, are to be served and filed no later than 16 December 1994;
(2)[sic] any material not served and filed in accordance with this direction is only to be admitted by leave of the Tribunal."
The applicants did not comply with the AAT's directions dated 9 November. On 7 December 1994 an officer of the Tribunal spoke to Mr Lynch who asserted that he had sent material to the AAT by registered mail, but the material had not, by that date (7 December), been received in the registry of the AAT.
10.Under cover of a letter dated 2 December 1994 which Mr Catt received on 6 December 1994, Mr Lynch forwarded to Mr Catt what he described in the covering letter as a "file of documents relating to the hearing on 12th January, 1995."
11.An AAT file note dated 22 December reads as follows:
"P. LYNCH
– (A) is attending hearing himself.
– only person likely to call is P. LYNCH
– (A) advised to d/w Tax barrister."
The hearing on 12 January 1995
The transcript of the hearing before Senior Member Barbour, was in evidence before me. It seems to me to be important, when reading the transcript, to recall that Mr Lynch had clearly given the AAT to understand that the applicants would be appearing in person on the hearing.
The Commissioner was represented by Mr Gibb of counsel. Mr Ball was very late in arriving because of a misunderstanding between him and his taxi driver. At the outset, the following exchange occurred between Senior Member Barbour and Mr Ball.
"MR BARBOUR: What I'd like to do initially is something a little unusual. Firstly, Mr Ball, I take it that today you're unrepresented ---
MR BALL: Yes.
MR BARBOUR: --- and you'll be representing yourself in the matter.
MR BALL: Yes.
MR BARBOUR: Do you intend to call any oral evidence today?
MR BALL: No, sir. The only evidence I'll be offering to you, sir, is what has been given to you by Mr Lynch and my own verbal evidence.
MR BARBOUR: Well, that's why I'm asking you. You intend to give evidence yourself, do you, in relation to some of these matters?
MR BALL: Yes, sir.
MR BARBOUR: All right. Why is your evidence not the subject of an outline or a statement as required by my direction?
MR BALL: Well, sir, I've been tied up with the Supreme Court for 18 months and I haven't had - I've left everything to Mr Lynch to look after.
MR BARBOUR: Well, you've been tied up in the Tribunal in this matter for almost 12 months as well, Mr Ball.
MR BALL: I realise that, sir, but I'm only one person.
MR BARBOUR: Well, that doesn't help answer the question, I'm afraid. Why hasn't one been prepared?
MR BALL: Well, I can't honestly say that, sir. I've only just been appropriate of this on Tuesday, this file, as such. I have been tied up in the Tribunal, I've also been off very sick the last few months under doctor's orders and under doctor's prescriptions. So it's been physically and mentally impossible for me to pursue this case since I've come out. That's the only thing I can say, sir.
MR BARBOUR: Well, Mr Lynch is still your representative on record. Why has he not been able to comply?
MR BALL: Well sir, I've just tried to explain to you, sir. I have been sick, very sick, and I have left everything to Mr Lynch and I've only conversed with Mr Lynch this week, and I've left everything - or I thought I'd left everything to him to handle, sir." (T 2.12-3.15)
A reading of the transcript reveals that in several ways, Senior Member Barbour attempted to assist Mr Ball. He allowed him to rely upon a ground of objection not contained in the notice of objection (that the Commissioner had not allowed the full cost of the subdivision); he allowed Mr Ball to give oral evidence notwithstanding the applicants' failure to comply with the directions made on 9 November 1994; he allowed Mr Ball to rely upon documentary material lodged with the AAT by Mr Lynch out of time; he varied the AAT's usual procedure by inviting the Commissioner's counsel to outline the issues for the benefit of the AAT and for the assistance of Mr Ball; and he repeatedly invited Mr Ball to tender any documentary
evidence, give any oral evidence or make any submissions he might wish.
On the hearing before me, the criticism which is levelled at the AAT is that the Senior Member did not raise with Mr Ball the possibility of his applying for an adjournment, in circumstances in which, according to the submission, (a) it should have been obvious that Mr Ball was unable to cope, and (b) Mr Ball informed the Senior Member that Mr Lynch who understood the case had informed Mr Ball only a few days previously, that he (Mr Lynch) would be unable to attend the hearing with Mr Ball.
The Senior Member foresaw that Mr Ball might face difficulty in proving that costs which appeared from the documents to have been incurred by other entities were properly to be treated as if in fact incurred by the Company as trustee. The Senior Member explained to Mr Ball several times the nature of the issues before him and the problems in the way of his simply taking an overall view of the taxation positions of the Company, Lulworth Investments Pty Ltd and Ball Equipment and Leasing Pty Ltd. In particular, he referred to the problem that the affairs of those companies were not before him (no doubt one difficulty which he had in mind was that it would not be known whether deductions claimed had already been allowed against the assessable income of those companies). Mr Ball responded by referring to difficulties which he had experienced in his private life. The Senior Member said this:
" ... but my concern is this, Mr Ball, I do not know how clearly you understand the jurisdiction of the Tribunal, but all I can do at the conclusion of hearing evidence from both parties is to either affirm the decision of the Commissioner in relation to you and your wife, to set it aside and put a different decision in place, and either of those courses are going to be limited given my initial concurrence with the submissions from Mr Gibb to the matters which relate only to M and P Ball which are the matters over which I have jurisdiction. Now, that means that I am not going to have much flexibility in coming to a conclusion in these proceedings which might offer you, for want of a better expression, a more appropriate outcome or an outcome that you might in fact be able to feel more comfortable with." (T 10.30-11.04)
Exchanges between the Senior Member and Mr Ball which are particularly relevant to the question of adjournment are the following:
"MR BALL: This is the story, sir, he [Mr Lynch] has gone back to the first identity of the first business, Lulworth Investments, he has also listed, I think, here, the tax returns of Ball Equipment and Leasing from those dates required from the Tax Department.
MR BARBOUR: But none of those things help me. As I said to you at the beginning, I cannot inquire into those areas. Those returns and those matters are related to those entities not to M and P Ball and that is why I am saying to you that if you want to proceed in this hearing we can, there is no problems with that all, but what you are going to have to do is show expenses incurred which are able to be regarded as allowable deductions by M and P Ball, not by these other entities because those other entities and their issues are not before me.
That is why I am suggesting to you that your interests in fact might be better served by trying to discuss with the tax office whether there is any way to negotiate this matter to both parties satisfaction rather than me have to formally find in a particular way according to law.
MR BALL: I am quite open to talk to the Tax
Department and see what their sentiments are, sir. I have done my best, as I said in the past I have left everything to accountants and I always thought there was accountants before to do business - I am only an engineer and a layman, I do not know the ins and outs of the law as an accountant or as a solicitor and I have always employed these gentlemen to look after my affairs. It is evident by this that Mr Dixon [the previous accountant of Mr and Mrs Ball], or you know, there is no uncertainty in my mind that Mr Dixon has been negligent in this job.
MR BARBOUR: All right, well, you should take action against Mr Dixon in another forum.
........ ........ ........ ........ ........ ........ ..
MR BARBOUR: ... I am just fearful that this is such a convoluted matter what we have before us at the tribunal is one very, very minor aspect of it. I will make a decision about whether to proceed or not, subject to whether or not some agreement can be reached and I certainly will want to continue the matter today if we need to do that so you know that that will happen." (T 12.26-13.10; 13.34-13.39 - emphasis supplied)
In response to the Senior Member's suggestion, Mr Ball agreed to have a discussion with representatives of the Commissioner. Following an unfruitful adjournment for that purpose, the hearing proceeded.
Mr Ball gave evidence and was cross examined. The Senior Member provided considerable guidance to Mr Ball. A reading of the transcript reveals that Mr Ball's own utterances during the course of the hearing were often vague generalisations which had little to do with the issues. Mr Ball frequently spoke in disjointed and unfinished sentences. However, it should not be concluded that this, without more, showed the Senior Member that Mr Ball did not understand the proceeding. It may well be that in the absence of countervailing documentary evidence, it would have been difficult for even a properly instructed accountant or legal practitioner to prove that the costs had been borne by the Company.
REASONS FOR DECISION OF THE AAT
In relation to the transfer of the Land, the AAT referred to a photostat copy valuation record of the Tamworth City Council which Mr Ball had tendered. This included a sticker that indicated the value of the Land as $220,000. The Senior Member noted that Mr Ball had not, however, provided convincing supporting evidence, such as an independent valuation, confirming the price of $220,000. In particular, the Senior Member recorded that Mr Ball had not pointed to any agreement that the Company had undertaken to pay him $220,000, or that he had provided to the Company that amount by way of loan for the purchase. The Senior Member said that he was not prepared to prefer the sticker on the Council records to the report of the Australian Valuation Office.
In relation to subdivision costs, the Senior Member noted that the evidence did not establish any direct link between any of the moneys expended on the subdivision, and the Company. He noted that the evidence led by Mr Ball related to amounts owing and/or paid by Lulworth Investments Pty Ltd and/or by Ball Equipment and Leasing Pty Ltd.
Finally, in relation to the "spec" house, the Senior Member said that Mr Ball had not produced any evidence showing a relationship between the Company and the "spec" house allegedly built for the purpose of advertising and selling the subdivision. Moreover, he recorded that the only expenses identified by Mr Ball in oral evidence as relating to the "spec" house were shown as having been paid by Ball Equipment and Leasing Pty Ltd through its own cheque accounts.
REASONING ON THE APPEAL
Mr P J O'Halloran had been the solicitor on the record in the present proceeding for Mr and Mrs Ball until 18 December 1995. On that date they filed a "notice of intention to act without a solicitor" and Mr O'Halloran filed a "notice of ceasing to act as solicitor". Notwithstanding this, at the commencement of the hearing before me Mr O'Halloran sought leave to appear for the applicants "in an amicus curiae capacity or in [the] alternative on a pro bono basis" (T 2.02-2.03). I granted him leave to appear for the applicants on the hearing and he did so.
Mr O'Halloran summarised his clients' case as follows:
"... Mr and Mrs Ball were unprepared for this hearing and the information which they had gathered - they should have gathered it before the hearing - they were unaware of the requirement to do so. They have since come into new material which, in my submission, is relevant to this appeal. We say that had Mr Ball properly prepared his case and had he properly researched his case this information should have been available. It simply was not. There was a reason for that. Mr Ball says that he had engaged, since 1992, his accountant, Mr Lynch, who is here today to act for him in relation to this particular matter." (T 7.08-7.16)
Mr O'Halloran submitted that in order for his clients to have had the benefit of procedural fairness before the AAT, it was incumbent on the Senior Member to advise Mr Ball of his right to apply for an adjournment. In this respect, Mr O'Halloran relied heavily on Titan v Babic (1994) 49 FCR 546 (FC).
In Titan v Babic a Mr Titan claimed to recover damages in the Supreme Court of the Australian Capital Territory in respect of personal injury suffered by him in a motor accident. He appeared for himself before the Master of that Court. He was informed by the Master that the time would come during the hearing for him to call any witnesses. He said that he was not able to arrange for his witnesses to be present in such a short time. The Master replied that that was a problem for Mr Titan. The Master included in his award of damages $1,000 for loss of earning capacity. Mr Titan appealed against the inadequacy of this amount, contending that he had been forced to present his case when he was not ready to do so, and, in particular, at a time when he did not have his witnesses available. The Full Court dismissed his appeal, noting that he faced the difficulty that he had not asked for an adjournment.
On a further appeal to this Court, a Full Court of this Court said this:
"The question remains whether the Master should have allowed Mr Titan an adjournment to call witnesses. Where it is apparent that a party who does not have legal representation has misunderstood procedural requirements so that he or she is not in a position to complete the presentation of evidence, an adjournment might be considered in the interests of justice provided that no irreparable substantive or procedural injustice is done to the other party involved. In any such case the granting of an adjournment will be a matter of discretion. In this case there was no application for an adjournment nor does there seem to have been any intelligible explanation to the Master of Mr Titan's failure to arrange his witnesses. It may be that in some cases a tribunal should, to avoid possible injustice, inquire of an unrepresented person the reason for the failure properly to prepare his or her case. Again, that is a matter of discretion limited by the necessity that the tribunal be, and appear to be, impartial as between the parties. This was not a case in which the Master was obliged to undertake such an inquiry. On the face of the record there was no procedural error on his part and the Full Court was correct in the way that it dealt with this issue. It follows that there was no occasion before the Full Court and one before this Court to receive the additional evidence which Mr Titan sought to tender." (at 554-555, emphasis supplied)
In the present case, Mr Ball gave evidence that he had instructed Mr Lynch in and since 1992 to represent him in all dealings with the Commissioner. He said that he instructed him to represent him on the "telephone hearing" on 13 October but was not present with Mr Lynch when that hearing took place. On that occasion and again on 9 November Mr Lynch clearly stated to the AAT (a) that Mr Ball would be appearing for himself on the hearing, and (b) that he (Mr Lynch) would not be representing him. Mr Ball's appearance for himself on the hearing and Mr Lynch's non-appearance for him, were therefore in conformity with what Mr Lynch had told the AAT.
Before me, Mr Lynch said in cross examination that he had understood the word "represent" to refer to representation by a legal practitioner. Accordingly, in Mr Lynch's mind Mr Ball was always going to be "unrepresented" even though he (Mr Lynch) in fact intended, in some sense to "appear for" Mr Ball on the hearing. His evidence was that he had had that intention until, over the Christmas/New Year holiday period, he decided that his wife's pregnancy and associated difficulties would require him to be in Tamworth on 12 January.
Both Mr Ball and Mr Lynch gave evidence that Mr Lynch's file had been handed over by Mr Lynch to Mr Ball only a couple of days prior to the hearing on Thursday 12 January 1995. Mr Lynch's diary reveals that Mr Ball had an appointment with him on Monday 9 January at 4.00 pm. Mr Ball gave evidence before the AAT on Thursday 12 January that he had had the papers only since "Tuesday" (10 January). I accept that in fact Mr Lynch handed over his file to Mr Ball on 9 or 10 January and that Mr Ball had had, in effect, at most only two full days prior to the hearing in which to study them. Mr Ball's evidence was that he took the file down to the hearing but had not read it before the hearing or otherwise prepared himself for the hearing.
Mr Lynch was, of course, cross-examined on his evidence that he had always intended to "represent" and "appear for" Mr Ball on the hearing, in view of the clear indication to the contrary which he had given to the AAT over the telephone on 13 October, 9 November and 22 December, 1994. He said in evidence that he had intended to convey to the AAT only that Mr and Mrs Ball would not be legally represented, that is to say, represented by a solicitor or barrister. But that is not the meaning that his words would have conveyed to the AAT.
In relation to his conversation with an officer of the AAT on 22 December, the cross examination of Mr Lynch was as follows:
"Would you agree that you told the inquirer from the Tribunal on that date that the applicant would be attending the hearing himself?---It - it would appear that that's what I said, yes. I still go back to what I said earlier, that I believed that what it was being referred to was legal representation.
Would you agree what you were conveying there was that you were not going to be appearing for him, is not that right?---I guess in the - in that sense of the word, yes. I go back to what I what I said that I - I believed that what was being referred to was legal representation and that he would not have legal representation.
You were contemplating that you might be called as a witness?---Yes. I guess - because the question that probably came from - if it was Simon Cohen, was will there be any witnesses called and I - in my naivety assumed that, yes, that was me. There wasn't anyone else that Mr Ball had organised to go down to the hearing." (T 34.30-35.10)
I find that Mr Ball and Mr Lynch shared an understanding that Mr Lynch would accompany Mr Ball to the hearing and that in some ill defined sense Mr Lynch would "represent" or "support" Mr and Mrs Ball at the hearing. I find that Mr Lynch ceased to have that understanding in the Christmas/New Year period and that Mr Ball ceased to have it on 9 or 10 January. But I also find that Mr and Mrs Ball had, through their agent authorised for the purpose, informed the AAT that Mr Ball would be appearing in person and that Mr Lynch would not be appearing for him. Accordingly, the Senior Member had no reason to think that Mr Ball's appearance in person was a departure from what Mr Ball and Mr Lynch had always intended.
The AAT had also been told that Mr Lynch would be a witness. But no outline of witness statement by Mr Lynch (or, for that matter, by Mr or Mrs Ball) had been filed with the AAT.
The situation, as it must have appeared to the Senior Member, was that as had always been intended Mr and Mrs Ball were unrepresented; Mr Lynch had suddenly become unavailable as a witness or to advise Mr Ball; the AAT had the documents to be relied on by Mr and Mrs Ball which Mr Lynch had provided; those documents did not prove the case propounded by Mr and Mrs Ball that the Company had incurred the costs in question and were, in fact, in the absence of further evidence, inconsistent with that case. It must have been (and remains) difficult to understand how this evidentiary gap could have been filled by anything that Mr Ball's accountant might say.
I do not think that in the circumstances which confronted the Senior Member, Mr Ball's difficulty in putting a coherent and persuasive case to the AAT coupled with his statement that he had lost the assistance of Mr Lynch shortly before the hearing, gave rise to an obligation on the AAT to raise with him the question of an adjournment. The AAT was entitled to think that the absence of Mr Lynch to assist Mr Ball was simply one of those misfortunes which are suffered from time to time by persons who conduct litigation, whether in person or through a legal representative.
There was no reason for the AAT to think that Mr Ball was suffering any disadvantage that is not suffered by many litigants in person. The Senior Member appreciated, and informed Mr Ball of, the nature of the difficulties which he and Mrs Ball confronted. The AAT was entitled to think, and it seems to have been the fact, that the presence of Mr Lynch would not have overcome those difficulties. Mr and Mrs Ball lacked evidence supportive of their case.
There was no reason why the Senior Member should have thought that the case fell into the exceptional category of case referred to in Titan v Babic in which there might be an obligation on the AAT to inquire. It was, however, a case in which the Senior Member did "bring to [Mr Ball's] attention the critical issue or factor on which the administrative decision is likely to turn so that he [might] have an opportunity of dealing with it" (Kioa v West (1985) 159 CLR 550 at 587 (per Mason J)).
In one of his affidavits, Mr Ball said that following the hearing he obtained documents relevant to the issues which had been before the AAT. He annexed copies of these to the affidavit. The Commissioner objected to their admission into evidence but, in the alternative, submitted that they did not advance Mr and Mrs Ball's case. Some of this "fresh" evidence was in fact already before the AAT as part of the bundle of documents supplied by Mr Lynch. As to the rest, it is not shown that it was of such a kind that it could not, by the exercise of reasonable diligence, have been before the AAT on 12 January 1995. Moreover, it was of such a kind that its presence would not have made a difference in the result arrived at by the AAT, since it does not prove the incurring of cost by the Company as trustee. (Only one of the documents annexed to Mr Ball's affidavit could possibly be suggested to be probative, namely a statement of account dated 31 May 1986 from "Monier Roofing" to "Ball M & P" for $2,670 for "Invoice #59420" but even in this case, the addressee may be Mr and Mrs Ball as distinct from the Company and the subject matter of the invoice does not appear.)
I will address one example of this further evidence. It is a copy of a deed dated 2 July 1980 which was supposed to provide evidence that the purchase price payable by the Company to Mr Ball for the Land was indeed $220,000. The deed is in the nature of a joint venture agreement between Mr and Mrs Ball and Lulworth Investments Pty Limited. The Company is not a party to it. Both Mr and Mrs Ball are referred to as "the owner" of Portion 85 Evans and Mitchell Streets, Westdale, NSW and the deed recites that "the Parties hereto have agreed to acquire the land from the owner at the price set forth in the ... second schedule beside the words the Land Price". There is handwritten into the document "$220,000.00". This is simply not evidence of an agreement between Mr Ball as vendor and the Company as purchaser showing that the Company incurred a liability to Mr Ball of $220,000 as the price for the Land.
I asked Mr O'Halloran how the documents annexed to Mr Ball's affidavit would have made any difference to the case before the AAT. His response was that if Mr Lynch had been before the AAT he would have linked the documents to the Company. But there is not before me, for example, any outline of oral evidence which Mr Lynch would have given or which he would now give to the AAT directed to achieving that result. Moreover, it is difficult to understand how a professional adviser could give oral evidence which would have the desired effect. Prima facie, the evidence required would be documents showing that ultimately the Company had borne the cost. Mr Lynch swore an affidavit and was cross examined before me, but there remains no evidence from him suggesting a connection between the Company and either the documents which were before the AAT or the additional ones annexed to Mr Ball's affidavit.
On the evidence before me, no purpose is shown which would have been served by an adjournment if one had been granted; cf Stead v State Government Insurance Commission (1986) 161 CLR 141.
Mr and Mrs Ball do not submit before me that on the evidence before the AAT, the Senior Member erred in dismissing the application.
It is convenient now to summarise my reasons for deciding that the present appeal should be dismissed.
(1)It was not incumbent on the AAT to raise with Mr Ball the question of an adjournment, particularly having regard to the way in which Mr and Mrs Ball had represented their position to the AAT and to the Commissioner, through their agent, authorised for the purpose, Mr Lynch.
(2)Mr and Mrs Ball were given full opportunity to put their case before the AAT.
(3)On the evidence before me, there was and is no reason to think that Mr Lynch could have put, or can now put, before the AAT evidence or submissions which might have altered the result.
CONCLUSION
For the foregoing reasons, the grounds of appeal are not made out and the appeal should be dismissed with costs.
I certify that this and the preceding 27 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.
Associate:
Dated:28 June 1996
Heard: 7 June 1996
Place: Sydney
Decision: 28 June 1996
Appearances: Mr P O'Halloran, solicitor of R J O'Halloran & Co, solicitors appeared for the applicants.
Mr S W Gibb of counsel instructed by the Australian Government Solicitor appeared for the respondent.
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