Benjamin and Commissioner of Taxation (Taxation)
[2017] AATA 39
•19 January 2017
Benjamin and Commissioner of Taxation (Taxation) [2017] AATA 39 (19 January 2017)
Division: TAXATION AND COMMERCIAL DIVISION
File Number: 2016/5897–5902
Re: JOHN BENJAMIN
APPLICANT
And:COMMISSIONER OF TAXATION
RESPONDENT
DECISION
Tribunal Deputy President S A Forgie
Date 19 January 2017
Place Melbourne
The Tribunal decides to:
refuse to grant the applicant’s application for an extension of time within which to lodge an application for review of the respondent’s reviewable objection decision dated 16 September 2008.
………[sgd]…………….
Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – application for extension of time to apply for review – applicant’s previous application for an extension refused and appeal to Federal Court dismissed – whether principles of functus officio, estoppel or res judicata limit Tribunal’s jurisdiction to hear application – not applicable.
PRACTICE AND PROCEDURE – Application to dismiss application for extension of time under s 42B of the Administrative Appeals Tribunal Act 1975 – power does not extend to applications for an extension of time.
PRACTICE AND PROCEDURE – Whether first decision concerning extension of time application, or parts of it, can be adopted in second application for extension of time – application of principles in Morales v Minister for Immigration and Multicultural Affairs permits adoption in certain circumstances.
LEGISLATION
Acts Interpretation Act 1901; s 13
Administrative Appeals Tribunal Act 1975; ss 2A, 3(1), 25(1), 25(2), 25(3), 25(3A), 25(4), 25(4A), 25(6), 29(1), 29(2)-29(6), 29(7), 29(8), 29(9)-29(10), 33(1)(c), 34D, 42A, 42B, 42B(1), 42B(2), 42C, 43
Administrative Appeals Tribunal Amendment Act 1993; s 17
Income Tax Assessment Act 1936; ss 175A, 227(3)
Taxation Administration Act 1953; ss 2(1), 14ZQ, 14ZV, 14ZY(1), 14ZY(1A), 14ZY(1B), 14ZY(2), 14ZZ(1)(a), 14ZZC
Tribunals Amalgamation Act 2015; s 3 and Schedule 1; Items 40 and 116CASES
Benjamin v Commissioner of Taxation [2016] FCA 1157
Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541; 139 ALR 1; 70 ALJR 866
Brown v Federal Commissioner of Taxation [1999] FCA 563; (1999) 99 ATC 4516; (1999) 42 ATR 118
Budd v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1540
Chalk v Commissioner for Superannuation [1994] FCA 1063; (1994) 50 FCR 150; 33 ALD 420; 19 AAR 450
Comcare v A’Hearn [1993] FCA 498; (1993) 45 FCR 441; 119 ALR 85
Federal Commissioner of Taxation v Brown [1999] FCA 1198; (1999) 99 ATC 4852; 42 ATR 672
Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344; 58 ALR 305; 7 ALD 315
Mentink v Minister for Home Affairs [2013] FCAFC 113
Minister for Immigration and Multicultural Affairs v Eshutu [1999] HCA 21; (1999) 197 CLR 611; 162 ALR 577; 54 ALD 289; 73 ALJR 746
Morales v Minister for Immigration and Ethnic Affairs [1995] FCA 1688; (1995) 60 FCR 550; 41 ALD 71
Morales v Minister for Immigration and Multicultural Affairs [1998] FCA 334; (1998) 82 FCR 374; 154 ALR 51; 26 AAR 548; 51 ALD 519
Phillips v Australian Girls’ Choir Pty Ltd & Anor [2001] FMCA 109
Ragless v Prospect District Council [1922] SASR 299
Re Benjamin and Commissioner of Taxation [2015] AATA 923
Re Filsell and Comcare [2009] AATA 90; (2009) 49 AAR 506
Re Matusko and Australian Postal Corporation [1995] AATA 14; (1995) 21 AAR 9
Re Rana and Military Rehabilitation and Compensation Commission [2008] AATA 558; (2009) 104 ALD 595; 48 AAR 385
Re Wang and Minister for Immigration and Border Protection [2016] AATA 595
Re Wang and Minister for Immigration and Citizenship [2013] AATA 483
Re Wiegand and Comcare [2010] AATA 790
Re Wiegand and Comcare [2012] AATA 623
Re Wiegand and Comcare [2014] AATA 413; (2014) 141 ALD 219; 63 AAR 526
Sun Zhan Qui v Minister for Immigration and Ethnic Affairs [1997] FCA 324
Telstra Corporation v Hannaford [2006] FCAFC 87; (2006) 151 FCR 253; 43 AAR 105; 90 ALD 263SECONDARY MATERIAL
Explanatory Memorandum to the Administrative Appeals Tribunal Amendment Bill 1992
Explanatory Memorandum to the Tribunals Amalgamation Bill 2014
Second Reading Speech of the Administrative Appeals Tribunal Amendment Bill 1992Pearce and Geddes, Statutory Interpretation in Australia 8th Edition, Butterworths, 2014
REASONS FOR DECISION
On 1 November 2016, Mr John Benjamin applied for an extension of time within which to lodge an application for review of an objection decision made by the Commissioner of Taxation (Commissioner) dated 16 September 2008. Mr Benjamin had previously made a similar application in relation to the Commissioner’s objection decision on 20 August 2015. Senior Member Fice had refused to grant that application and Davies J had dismissed Mr Benjamin’s appeal from his refusal. I have also decided to refuse his second application for an extension and set out my reasons below.
As I was concerned with a second application for an extension in relation to the same objection decision, the submissions raised issues regarding the Tribunal’s being functus officio to consider the second application, issues of estoppel and res judicata. They also raised issues whether the Tribunal could dismiss an application for an extension of time within which to lodge an application for review of a decision, as opposed to an application for review of a decision, under s 42B of the Administrative Appeals Tribunal Act 1975 (AAT Act). Finally, they raised issues whether the decision, or aspects of the decision resolving the first application could be adopted in the second. I have analysed the issues below and have attempted to tease out the relevant legal principles that apply in relation both to applications for review of decisions as well as to applications for an extension of time within which to lodge those applications. Only by determining the underlying principles and applying them can there be consistency in the outcome of the determination of any type of application. In summary, I have come to the following conclusions on these matters:
(1)Issues regarding the Tribunal’s jurisdiction and, in particular, whether it is functus officio are determined by reference to the relevant enactment conferring the right to apply to the Tribunal of review of a decision and by reference to an analysis of the particular decision of which review is sought.
(a)A decision may be in the same terms as a decision that has been made and reviewed at an earlier time but be an entirely separate decision made on a separate claim or application.
(b)The same approach applies to an application for an extension of time within which to lodge an application for review of a decision.
(2)The Tribunal does not have power under s 42B of the AAT Act to dismiss an application for an extension of time for review of a decision.
(a)The power under s 42B is limited to the dismissal of applications for review.
(3)Where the Tribunal has jurisdiction but the decision is in the same terms as a decision previously reviewed by it or an application for extension of time has previously been considered, it may consider whether it should adopt the decision previously made.
THE FACTUAL BACKGROUND
In this paragraph of my reasons, I set out my understanding of the events preceding the Commissioner’s audit. They are raised by the material lodged on behalf of Mr Benjamin in both the earlier proceedings[1] and in this but I do not make any findings of fact regarding them. It would seem from a letter written by his solicitors, Logie-Smith Lanyon, on 19 April 1999 to Mr Terry Benjamin that, in or about 1998, Mr Benjamin regarded himself as a participant in a joint venture arrangement with Mr Terry Benjamin and Mr Michael Brooks and associated entities to purchase and develop the Lakeside Hospital site in Ballarat. Mr Benjamin’s solicitors asserted that both he and Mr Terry Benjamin had worked together to prepare and submit a detailed and far-ranging tender for the purchase of the property. In the course of the tender’s preparation, Mr John Benjamin was responsible for bringing together a team of expert consultants to assist them. Their tender was ultimately successful.
[1] No. 2015/4322-4327
In December 1988 and in further pursuit of the joint venture, Logie-Smith Lanyon’s letter continued, Mr Terry Benjamin arranged for a company, Ben Brook Homes Pty Ltd, to enter a contract for the purchase of the site at a price of $1,518,000. Mr Benjamin offered Mr Terry Benjamin his share of the deposit payable under that contract but Mr Terry Benjamin advised Mr Benjamin that he refuted the existence of the joint venture. Instead, he and Mr Brooks would proceed with the acquisition and development of the site to the exclusion of Mr Benjamin. Through his then solicitors, Logie-Smith Lanyon, Mr Benjamin advised Mr Terry Benjamin that he regarded his actions as an actionable repudiation of his obligations under the joint venture. Consequently, on the settlement of the sale of the land in April 1999, any profits from the acquisition, development or realisation of the land should be held as to one third on a constructive trust for Mr Benjamin.
On 29 October 1999, Mr Benjamin and all other interested parties entered a Deed of Settlement. Under it, Mr Benjamin received a 25% share in certain real estate and a sum of $1,500,000.00 payable in seven instalments between November 1999 and October 2004.
In or about 2006, the Commissioner undertook an audit of Mr Benjamin’s taxation affairs in relation to the years of income ending 30 June 2000 to 30 June 2005 inclusive. I have dated the commencement of the audit to 2006 in view of the letter written by Poulton, Elliot and Grey dated 5 July 2006 and headed “Re: John Benjamin”. It is dated 5 July 2006 and encloses a Memorandum of Advice dated 25 June 2006 regarding the characterisation for taxation purposes of an amount of $1.5 million received by Mr Benjamin from 20 November 1999 to 22 October 2004. Counsel was instructed by Mr Grey and, due to the urgency of the matter, had not had a conference with Mr Benjamin.[2] In his Memorandum of Advice, Counsel noted that, on his instructions, the Deed of Settlement is purely the instrument of a family settlement and, in fact, represents the logical last step in a family dispute which has split the family in two.
[2] Counsel’s Memorandum of Advice at [4]
On 14 February 2008, the Commissioner issued assessments or amended assessments to Mr Benjamin in relation to those years of income. In summary, the amended assessments were based on the following adjustments to Mr Benjamin’s income:
Income year
Taxable income as returned/assessed
Amount of adjustment to business income
Adjusted/Amended Taxable income
2000
$0.00
$563,000.00
$563,000.00
2001
$0.00
$200,000.00
$200,000.00
2002
$0.00
$200,000.00
$200,000.00
2003
$0.00
$200,000.00
$200,000.00
2004
$0.00
$200,000.00
$200,000.00
2005
$0.00
$200,000.00
$200,000.00
Describing himself as “John R Benjamin of Davey Accounting Plus P.O. Box 97 LAUNCESTON TAS. 7250”, Mr Benjamin lodged objections to those amended assessments and requests for remission of penalty under s 227(3) of the Income Tax Assessment Act 1936 (ITAA36). With regard to the amounts assessed as income, Mr Benjamin’s grounds of objection rested in part on the ground that the payments were received as a result of a family dispute with his brother and, as such, were neither capital in nature or nor revenue. Although the dispute between the two brothers arose in relation to Mr Benjamin’s interest in a property, it came to a head through circumstances relating to the acquisition and development of the site in Ballarat and its resolution was not calculated by reference to the loss of profits in that development.
The objections were dated 18 April 2008 but, in a letter dated 23 May 2008 and addressed to Mr Benjamin care of his accountants, the Australian Taxation Office (ATO) advised him that his objections did not provide all of the information needed to make decisions on them. The ATO sent a reminder letter to the same address on 11 August 2008 but I have no record of Mr Benjamin’s having responded to either letter.
On 16 September 2008, the Commissioner disallowed his objections in full. Again, he addressed the letter advising of his decisions to Mr Benjamin care of his accountants in Launceston. At the beginning of his reasons, the Commissioner summarised the questions he considered were raised by the objections and his answers:
“1. Are you entitled to exclude the business income included in your assessments by the Tax Office following an audit for the 1999-2000 to 2004-05 years?
Answer: No
2.If not, are you entitled to claim business expenses against the business income included at audit?
Answer: No.
3.Were you and your tax agent reckless in the preparation of your tax returns?
Answer: Yes.
4.If so, can the administrative penalties imposed by remitted in full or part?
Answer: No.”
The Commissioner’s reasons for his decision were comprehensive but I will set out only a segment of them to give their flavour:
“It is the Commissioner’s view that the payments made to you are income in nature as they are similar in characteristics to the ones described in Reuter’s case [Reuter v Commissioner of Taxation 93 ATC 5030]. The reason for this view is that:
1.You have been, and continue to be, actively involved in property development projects through various entities.
2.You were involved in a number of projects where land was purchased, from both government and private vendors and rezoned for redevelopment, both residential and commercial.
3.You are experienced in engaging consultants to prepare tenders and submissions to government authorities for rezoning, planning approval and redevelopment of land.
4.In this case a payment was received as a result of a dispute between you and other parties. According to letters prepared for you by your lawyers, it was claimed that there was an agreement in place that stipulated that you were entitled to acquire a share of the development because you prepared the successful tender documents for the Lakeside site in Ballarat. It was claimed that you engaged consultants to prepare audio visual presentations, photographs and CD. The tender was ultimately successful and dispute arose when other parties sought to exclude you from purchasing a one third share of the development.
5.The other parties involved in the development settled the dispute by agreeing to pay you, a sum of money over a period of time, plus to transfer a share of a property, unrelated to the proposed development, to you. This settlement is evidenced by a settlement deed.
Based on the events that transpired and the reasons for making the payments it is reasonable for the Commissioner to conclude that they are of an income nature. In addition to having the characteristics of income, the payments were made over a number of years which coincided with when the expected profits would have been generated from the development.”
Mr Benjamin stated in his affidavit sworn on 12 September 2015 that Davey Accounting was no longer acting for him as at 16 September 2008. That is confirmed by an email written to Mr Mapleston by Mr Ken Davey on 12 October 2015 and reading:
“I confirm that as at the 16th September 2008 we did not act for Mr John Benjamin however I do not know if the Taxation Office was aware of that fact as we do not usually notify them when a client has left as the incoming accountant usually does that task.
A copy of the letter in question is in our files and it would have been forwarded to the last address we would have for the client. We do not know if the letter was received by Mr Benjamin.”[3]
Mr Benjamin said at [4] of that affidavit that he was then living in a unit on St Kilda Road in Melbourne.
[3] Affidavit of Mr Benjamin sworn on 12 September 2015 at Exhibit JB-2
On 6 November 2008, the Commissioner wrote to Mr Benjamin at the address of a unit on St Kilda Road in Melbourne. He advised Mr Benjamin that a total of $1,476,917.98 remained outstanding on his accounts. That amount included an amount of $1,476,607.13 as income tax. Payment was required by 12 November 2008, the Commissioner advised Mr Benjamin, and, if payment were not received, he would institute legal proceedings to recover that amount.
Between 10 October 2011 and 5 July 2012, the Commissioner issued seven statements setting out the amounts payable and overdue on those dates. I have six of the seven numbered statements. Each of those six is addressed to Mr Benjamin at a Post Office Box at “St Kilda Road Central”, Victoria with the postcode 8008, to which the Commissioner had previously sent correspondence.[4]
[4] I note that the postcode of St Kilda Road Central Post Boxes is 8008
On 24 October 2011, the Commissioner wrote to Mr Benjamin care of Mr James D Mapleston, solicitor, at his professional address in Melbourne. I do not have a copy of the letter to which the Commissioner was replying. The Commissioner’s reply began:
“PAYMENT ARRANGEMENT: INTEGRATED CLIENT ACCOUNT
We refer to your request regarding your outstanding accounts.
After consideration of your application your request has been refused. The reasons for refusal are:
It is a requirement that payment arrangement proposals should pay all amounts owed to the ATO in the shortest possible timeframe and be accompanied by an upfront payment. The ATO is not satisfied that the amount offered of $10,000 within 30 days, further payment of $10,000 in 4 months time and third payment of $10,000 in 7 months time will clear the ATO liability in the shortest possible timeframe.
Please note that you also have an individual tax debt which has not been addressed. For future considerations of a payment arrangement, please provide a detailed plan of the amount you nominate to pay and the frequency of the payment that addresses all debts you owe to the ATO.”
On 30 June 2014, the Deputy Commissioner obtained a judgment in the County Court of Victoria against Mr Benjamin in the amount of $2,734,107.99. He subsequently commenced bankruptcy proceedings by applying for a Bankruptcy Notice to be issued against Mr Benjamin on 31 July 2014.
At Mr Mapleston’s request, the ATO sent him a copy of its objection decision. Its email is dated 1 April 2015 and the copy of the decision that is attached is a computer generated copy on plain paper without a letterhead and that does not bear its date.
On 20 August 2015, Mr Benjamin lodged an application for review of the Commissioner’s objection decision, which he described as having been received by him on 1 April 2015 and dated 1 April 2015. He attached a copy of the undated objection decision. The Tribunal’s Registry wrote to Mr Mapleston, who had been shown as the contact person on the application, to advise that the application appeared to be out of time and to advise that he could request an extension of the time within which to lodge it. It did so on 24 August 2015. Mr Mapleston lodged an Extension of Time Application on 4 September 2015. Reference was made to the objection decision’s having been received on 1 April 2015 but the date of the decision was left blank on the application.
On 21 September 2015, the Commissioner gave notice that he was opposing the application for an extension of time. The Tribunal, constituted by Senior Member Fice, heard the application on 6 October 2015 and directed that Mr Benjamin lodge a statement explaining his reasons for the delay in lodging his application for review. He also gave the Commissioner an opportunity to respond. After receiving that material on 13 and 19 October 2015 respectively, Senior Member Fice decided on 30 November 2015 to refuse to extend the time within which Mr Benjamin might lodge an application to seek review of the Commissioner’s objection decision dated 16 September 2008.[5]
[5] Re Benjamin and Commissioner of Taxation [2015] AATA 923
On 16 December 2015, Mr Benjamin lodged an appeal in the Federal Court against Senior Member Fice’s decision.[6] Judgment was delivered by Davies J on 23 September 2016 when she dismissed the appeal.[7] During the course of the appeal, her Honour had given Mr Benjamin leave to lodge a Further Amended Notice of Appeal. Mr Benjamin was represented by both Mr Chris Wallis of counsel and Mr Mapleston in the Federal Court.
[6] VID928/2015
[7] Benjamin v Commissioner of Taxation [2016] FCA 1157
On 1 November 2016, Mr Mapleston lodged a further application for extension of time within which to lodge an application for review of the Commissioner’s objection decision dated 16 September 2008.
SUMMARY OF TIMELINE RELATING TO COMMISSIONER’S RECOVERY ACTIONS
In his affidavits, Mr Benjamin has set out his understanding of the relevant timeline in this matter:
Date
Event
16 September 2008
Commissioner’s Objection Decision
Not received as sent to Davey Accounting which was no longer acting for him.
Although he and his wife were living in a unit on St Kilda Road in Melbourne, they were overseas at the time while his wife received treatment for cancer. An account for accommodation and food from 11 September t0 20 October 2008 was Exhibit JB-4 to Mr Benjamin’s affidavit sworn on 12 October 2015[8] as were two invoices from the Strong Memorial Hospital. The account and the invoices showed a PO Box address at “St Kilda Road” with the postcode 8004. The number of the PO Box is different from that later used by the Commissioner to send Mr Benjamin Statements of Account: see [14] above.
23 August 2013
Mr Benjamin’s wife died.
8 June 2014
Service of County Court Writ
A process server lodged an affidavit in the County Court stating that he had served the writ on Mr Benjamin on 8 June 2014. Mr Benjamin denies having been served with that writ.[9]
County Court judgment
Judgment was entered against Mr Benjamin when he failed to enter an appearance. He stated that he had not entered an appearance as he had not been served with the writ.[10]
31 July 2014
Bankruptcy Notice issued against Mr Benjamin
Bankruptcy Notice numbered BN 173841.[11]
Proceedings No. MLG2190/2014 in the Federal Circuit Court relate to BN 173841. On 5 November 2014, a Registrar made an order for substituted service in relation to the Bankruptcy Notice. Service was to be effected on Mr Benjamin by post to both a residential address and to a Post Office Box at St Kilda Road, Melbourne as well as by delivering them to a person apparently over the age of 16 years and residing at the residential address or, if no such person was in attendance, by leaving them in the letter box at that residential address. The number of that Post Office Box matched that on the account from the accommodation and invoices from the hospital at JB-4 of Mr Benjamin’s affidavit sworn on 12 October 2015. The only difference was that the postcode was shown as “3004” on the order for substituted order and not “8004”. The residential address is that used by Mr Benjamin in his affidavit. Provided these steps were followed, service was deemed to have been effected on 12 December 2014.
1 April 2015
ATO emails copy of objection decision to Mr Mapleston
Mr Benjamin states that this was the first time that he had sighted the objection decision dated 16 September 2008.
20 August 2015
Application for review
Mr Benjamin lodged an application for review of the Commissioner’s objection decision.
24 August 2015
Application for extension of time
5 October 2015
Affidavit of Ms Anne Vandenhurk
Ms Vandenhurk deposed that she had made a thorough investigation to identify and locate documents related to the audit and objection in this matter. She had reviewed the ATO’s electronic management software and had made enquiries to locate the hard-copy audit and objection file. As a result, she had located most documents but had been unable to locate tender documents relating to the purchase of the Lakeside Hospital site. Ms Vandenhurk believed that the documents had been in the Commissioner’s possession but were no longer.
30 November 2015
Senior Member Fice’s decision
Application for extension of time refused.
7 April 2016
Commissioner lodges Creditor’s Petition
Federal Circuit Court proceedings No. MLG808/2016
23 September 2016
Judgment of Davies J
Appeal dismissed.
7 October 2016
Order for substituted service
A Registrar of the Federal Circuit Court ordered that the Creditor’s Petition might be served by: sending the documents by mail to an address on St Kilda Road, Melbourne; by handing them to a person apparently over the age of 16 years residing at that address or, if no such person is in attendance, by leaving them in the letter box at that address; sending them to a particular email address and to his solicitor’s email address; and by sending an SMS message to a particular mobile telephone number. Provided these steps were carried out by 24 October 2016, service was deemed to have been effected on 31 October 2016.
20 October 2016
Affidavit of Service of Creditor’s Petition
Affidavit addressing compliance with each means of service specified in the Order.
9 November 2016
Notice of opposition to Creditor’s Petition
Mr Benjamin stated that he intended to oppose the Creditor’s Petition on the grounds that service did not take place in relation to Mr Mapleston’s email address, it should not proceed until the determination of the proceedings in the Tribunal and so the validity of the debt. Further or in the alternative, Mr Benjamin wished to pay an agreed sum to settle the alleged debt over a 12 month period.
10 November 2016
Federal Circuit Court
Creditor’s Petition adjourned to 6 December 2016.
6 December 2016
Federal Circuit Court
Creditor’s Petition adjourned to 24 January 2017.
[8] The affidavit was lodged in support of both the current and previous application in the Tribunal.
[9] Affidavit sworn on 12 October 2015 at [8]
[10] Affidavit sworn on 12 October 2015 at [13]
[11] Affidavit sworn on 12 October 2015 at [8] and [9]
The evidence shows that Mr Benjamin was appointed a director of the following companies on the dates set out in the following table. That information comes from a report obtained from the records of the Australian Securities and Investments Commission (ASIC) on 1 October 2015. On that date, Mr Birmingham’s appointments had not come to an end:[12]
[12] Attachment H to Commissioner’s submissions lodged in first hearing
Company
Appointment Date
Role
Radiavinci Pty Ltd
30 May 2012
Director
Sun Biopharma Australia Pty Ltd
24 May 2013
Director
Sun Biopharma Australia Pty Ltd
24 May 2013
Secretary
Bio Foundation Ltd
16 January 2014
Director
Bio Foundation Ltd
16 January 2014
Secretary
Woondella Pty Limited
17 April 2014
Director
Attwood Park Pty Ltd
16 April 2015
Director
Attwood Park Pty Ltd
16 April 2015
Secretary
ASIC’s report also reveals that Mr Benjamin held positions in the following companies between the dates shown in the following table. I have shown only those companies in which he held those positions in or after 2004 when his wife became ill:
Company
Appointment Date
Role
Cessation Date
Feztron Pty Ltd
5 May 1988
Director
26 June 2006
Longreach Living Pty Ltd
30 October 2003
Director
15 March 2013
Longreach Living Pty Ltd
12 February 2007
Secretary
15 March 2013
Longreach Capital Holdings Pty Ltd
5 December 2003
Director
3 August 2007
Longreach Capital Holdings Pty Ltd
12 February 2007
Secretary
3 August 2007
Goodberry Holdings Pty Ltd
8 December 2003
Director
12 August 2004
Georgia Terraces Pty Ltd
10 February 2004
Director
3 August 2007
Georgia Terraces Pty Ltd
10 February 2004
Secretary
3 August 2007
GB Franchising Australia Pty Ltd
27 July 2004
Director
12 August 2004
Longreach (Chiltern) Pty Ltd
20 September 2005
Director
3 August 2007
Longreach (Chiltern) Pty Ltd
20 September 2005
Secretary
3 August 2007
Gippsland Holdings Pty Ltd
11 October 2005
Director
3 August 2007
Longreach (Ballarat) Pty Ltd
21 December 2006
Director
3 August 2007
Longreach (Ballarat) Pty Ltd
21 December 2006
Secretary
3 August 2007
Longreach Aviation Pty Ltd
21 December 2006
Director
3 August 2007
Longreach Aviation Pty Ltd
21 December 2006
Director
3 August 2007
Longreach (Horsham) Pty Ltd
23 January 2007
Director
3 August 2007
Longreach (Horsham) Pty Ltd
23 January 2007
Secretary
3 August 2007
Collagene Asia Pacific Pty Ltd
11 January 2007
Director
3 August 2007
Collagene Asia Pacific Pty Ltd
11 January 2007
Secretary
3 August 2007
Gippsland Holdings Pty Ltd
12 February 2007
Secretary
3 August 2007
Longreach Asset Management Pty Ltd
7 March 2007
Director
3 August 2007
Longreach Energy Pty Ltd
16 April 2007
Director
3 December 2008
Longreach Energy Pty Ltd
16 April 2007
Secretary
3 December 2008
Longreach Environmental Pty Ltd
19 April 2007
Director
12 August 2013
Eagle Wind Energy Pty Ltd
30 April 2007
Director
3 December 2008
Longreach Sustainable Technology Pty Ltd
30 April 2007
Director
3 December 2008
Endeavour Gardens Pty Ltd
14 May 2008
Director
12 August 2013
Endeavour Gardens Pty Ltd
14 May 2008
Secretary
12 August 2013
Longreach Family Living (Vic) Pty Ltd
20 September 2013
Director
18 May 2014
Longreach Family Living (Vic) Pty Ltd
20 September 2013
Secretary
18 May 2014
LEGISLATIVE BACKGROUND
The Tribunal’s jurisdiction to review decisions
Section 25(1) of the AAT Act provides that:
“An enactment may provide that applications may be made to the Tribunal:
(a)for review of decisions made in the exercise of powers conferred by that enactment; or
(b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.”
Particular provision is made for review of decisions made in the exercise of powers conferred by a Norfolk Island enactment[13] and where decisions have been made by a delegate.[14] Where an enactment makes provision in accordance with s 25(1), then s 25(3) specifies that the enactment:
“(a) shall specify the person or persons to whose decisions the provision applies;
(b)may be expressed to apply to all decisions of a person, or to a class of such decisions; and
(c)may specify conditions subject to which applications may be made.”
[13] AAT Act; s 25(2)
[14] AAT Act; s 25(3A)
Before its amendment by the Tribunals Amalgamation Act 2015 (Tribunals Amalgamation Act),[15] s 25(4) of the AAT Act provided that:
“The Tribunal has power to review any decision in respect of which application is made to it under any enactment.”
Since its amendment, what was expressly stated by s 25(4) must now be understood by implication. To do so is consistent with s 25(4A), which remains as part of the AAT Act. It provides:
“The Tribunal may determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues that it considers.”
[15] Tribunals Amalgamation Act; s 3 and Schedule 1, Item 40
The Tribunal’s jurisdiction to review the Commissioner’s objection decisions
Section 14ZZ(1)(a) of Part IVC of the Taxation Administration Act 1953 (TAA) provides for review of a reviewable objection decision by either the Federal Court or by the Tribunal. A “reviewable objection decision” is an “objection decision that is not an ineligible income tax remission decision”.[16] Section 2(1) of the TAA provides that the expression “objection decision” has the meaning given by s 14ZY(2). That means that a decision made by the Commissioner under ss 14ZY(1), (1A) or (1B) in response to a taxation objection is an objection decision.
[16] TAA; s 14ZQ
Subject to certain exceptions, s 175A of the Income Tax Assessment Act 1936 (ITAA36) provides that a taxpayer who is dissatisfied with an assessment made in relation to that taxpayer may object to it in the manner set out in Part IVC of the TAA. As the Commissioner has made amended assessments in this case, s 14ZV of the TAA must be kept in mind because it provides that:
“If the taxation objection is made against a taxation decision, being an assessment … that has been amended in any particular, then a person’s right to object against the amended assessment … is limited to a right to object against alterations or additions in respect of, or matters relating to, that particular.”[17]
Section 29(7) of the AAT Act: prescribed time within which to make an application and an extension of that time
[17] A “taxation decision” means, among other things, the assessment against which a taxation objection may be, or has been, made: TAA; s 14ZQ.
Section 29(1) of the AAT Act provides that “an application to the Tribunal for review of a decision” must comply with the six elements it prescribes. Of consequence in this case is s 29(1)(d), which provides:
“An application to the Tribunal for a review of a decision:
(a)-(cb)…
(d)if the terms of the decision were recorded in writing and set out in a document that was given to the applicant or the decision is deemed to be made by reason of the operation of subsection 25(5) or (5A) – shall be lodged with the Tribunal within the prescribed time.
…”
What amounts to the “prescribed time” and what occurs if no time is prescribed, are the subjects of ss 29(2) to (6).
Section 29(7) is concerned with extending the time which is otherwise allowed. It provides:
“The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for review of a decision (including a decision before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.”
Regard must also be had to s 29(8) when it provides:
“The time for making an application to the Tribunal for a review of a decision may be extended under subsection (7) although that time has expired.”[18]
[18] Sections 29(9) and (10) are concerned with procedural steps which have been followed in this case.
Modification of provisions of s 29 by the TAA
Section 25(6) of the AAT Act provides that an enactment may include provisions adding to, excluding or modifying the operation of various of its provisions including s 29. Section 14ZZC of the TAA modifies s 29 of the AAT Act so that it reads as if ss 29(1) to (6) were omitted and s 29(1) were to read:
“An application to the Tribunal for a review of a decision:
(a)must be in writing; and
(b)…
(c)must set out a statement of the reasons for the application; and
(d)must be lodged with the Tribunal within 60 days after the person making the application is served with a notice of the decision.”
Sections 29(7) and (8) of the AAT Act remain in place.
Power of Tribunal if application for review of a decision is frivolous, vexatious etc
Section 42B of the AAT Act provides:
“(1) The Tribunal may dismiss an application for the review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application:
(a)is frivolous, vexatious, misconceived or lacking in substance; or
(b)has no reasonable prospect of success; or
(c)is otherwise an abuse of the process of the Tribunal.
(2)If the Tribunal dismisses an application under subsection (1), it may, on an application by a party to the proceeding, give a written direction that the person who made the application must not, without leave of the Tribunal, make a subsequent application to the Tribunal of a kind or kinds specified in the direction.
(3)The direction has effect despite any other provision of this Act or any other Act.”
SENIOR MEMBER FICE’S REASONS FOR DECISION ON FIRST APPLICATION
Senior Member Fice considered the evidence before him under the headings of “Delay”, “Merits” and “Prejudice” before considering whether he should exercise his discretion to grant Mr Benjamin’s first application for an extension of time. I will summarise only the essential points of his findings and consideration:
(1)Delay
Reference was made to the evidence regarding Mr Benjamin’s assertion that he did not receive the Commissioner’s 2008 objection decision until 2015, the address to which the objection decision was sent, to his having held office in some eleven companies during the period from 2008 until the date of the application and to his late wife’s illness. Senior Member Fice concluded that:
“The above evidence discloses a less than satisfactory explanation for the seven year delay in seeking a merits review of the Commissioner’s Objection Decision. In a hearing of this nature, it is not for me to determine or to speculate as to why that may be the case. It is sufficient for me to simply state that the explanation given was unsatisfactory and it points to Mr Benjamin having rested on his rights or simply ignored his income tax liabilities following issue by the Commissioner of his Objection Decision. It also highlights the evidentiary difficulties which often arise following such a long period of delay. Invariably, memories will be inaccurate and, as is already demonstrated thus far, will be contradicted by contemporaneous objective evidence.”[19]
[19] [2015] AATA 923 at [34]
(2) Merits
“For the purposes of this application, as I have already indicated above, it is not my duty and in fact it would be incorrect for me to make any findings about the facts set out in the documents to which I have referred. However, simply accepting what is set out in the Logie-Smith Lanyon letter and the Deed of Settlement, the application of legal principles to those facts appears to support the Commissioner’s argument. Put at its highest from Mr Benjamin’s viewpoint, his prospects of succeeding in a merits review are not good. Unless the facts are found to be substantially different to those exposed by the documents before me on this application, it cannot be said that Mr Benjamin has an arguable case. In the materials Mr Benjamin lodged with the Tribunal for the purposes of this application for an extension of time, he has produced nothing which counters or may displace or alter the evidence which was before me.”[20]
[20] [2015] AATA 923 at [43]
(3) Prejudice
The Commissioner was unable to locate the tender documents considered during the audit and the consideration of the objection. There was evidence of a search in the ATO but it had been unsuccessful. There was evidence before Senior Member Fice that the Commissioner might be prejudiced if he were unable to give the Tribunal all relevant documents. Senior Member Fice said on this issue:
“In its letter to Mr Terry Benjamin, Logie-Smith Lanyon expressly referred to the submission of a detailed tender for the purchase of the property in question which was said to have been successful. The lawyers also said that Mr Benjamin was responsible for bringing together the team of expert consultants whose assistance resulted in the preparation of the detailed tender document which proved to be successful. It appears to me that the presence of a joint venture arrangement, as claimed by Mr Benjamin, is likely to be a significant issue on a merits review of the Commissioner’s Objection Decision. The tender document is likely to provide evidence of such an arrangement. Accordingly, I accept that the Commissioner will suffer prejudice should an extension of time be granted to Mr Benjamin.”[21]
[21] [2015] AATA 923 at [51]
Senior Member Fice also considered fairness under this heading:
“As I have already said above, the right sought to be relied on by Mr Benjamin, that is to have the Commissioner’s Objection Decision reviewed, is conditional. That right only exists in circumstances where he has lodged an application seeking a merits review within the statutory time which limits such applications. That right is extinguished if an application is not made within the statutory time limitation and all that remains is the exercise of discretion by the proposed reviewer. The discretion, while not fettered in any particular way, must nevertheless be exercised in accordance with the law. The common law principles regarding the exercise of discretion to extend time for the doing of an act are well and truly accepted and understood. Having made his application some seven years beyond the statutory time limit, Mr Benjamin only has the right to seek a hearing on the exercise of discretion to extend the statutory time period. Mr Benjamin has been given that right including extra time to lodge any further evidentiary material in support of his application. In those circumstances, it cannot be said that he has been denied procedural fairness.”[22]
(4) Conclusion
“I have found that Mr Benjamin has not provided a satisfactory explanation for the seven-year delay in lodging his application with the Tribunal seeking review of the Commissioner’s objection decision made on 16 September 2008. While a satisfactory explanation is not a prerequisite for the grant of an extension of time, it is a factor which I have taken into account when determining whether the Tribunal’s discretion to extend time should be exercised.
As for the merits of his claim, all that Mr Benjamin is required to do is to disclose that he has an arguable case. However, accepting the facts as they are stated in the evidentiary material which was before me on this application, and without making any findings of fact, I have found that Mr Benjamin does not have an arguable case. That is because the evidentiary material points to a commercial settlement and not the settlement of a family dispute as claimed by Mr Benjamin. In those circumstances, it is likely that the monies paid to Mr Benjamin in the resolution of that dispute are subject to taxation.
I have also found that the Commissioner is likely to suffer prejudice because significant relevant documents relating to the basis on which the dispute arose and was subsequently settled are missing. Those documents were used by the Commissioner in making his objection decision. While an applicant in a taxation proceeding of course bears the onus of proving that an assessment is excessive, and the Commissioner is not required to substantiate or prove his assessment, I can foresee evidentiary difficulties arising as a result of the absence of those documents.
Finally, Mr Benjamin expressed concern that if the extension of time were not granted, he would suffer significant detriment because it was quite likely that he would be bankrupted. Although I accept that to be a possibility, the absence of procedural fairness would be the only basis upon which Mr Benjamin might establish that his claim should be heard. In my opinion, Mr Benjamin has been accorded procedural fairness by the Tribunal in dealing with his extension of time application. He has been made aware of the grounds on which the Commissioner opposes an extension of time and he has had adequate time and opportunity to respond to those grounds.
It necessarily follows that, in Mr Benjamin’s circumstances, it is not reasonable to grant an extension of time for making an application to the Tribunal. The extension of time application lodged by Mr Benjamin with the Tribunal on 4 September 2015 is refused.’[23]
[22] [2015] AATA 923 at [54]
[23] [2015] AATA 923 at [55]-[59]
In her judgment in Benjamin v Commissioner of Taxation[24] on appeal from Senior Member Fice’s decision, Davies J found no legal error in his decision and dismissed the appeal.
[24] [2016] FCA 1157
SUMMARY OF SUBMISSIONS
On behalf of Mr Benjamin, Mr Mapleston acknowledged that he could not put forward a case precisely the same as that which he had put to Senior Member Fice. He accepted that would be an abuse of process. Instead, he relied on his producing new evidence explaining the reasons for the long delay. Although Mr Benjamin still maintains that he did not receive the Commissioner’s reviewable objection decision until 2015, he recognises that there has been a previous finding of fact regarding that issue and he has no new evidence relating to it. What his new evidence relates to is his suffering from depression and grief dating from approximately the time of the onset of his late wife’s illness in 2004, and certainly well before the Commissioner made his objection decision in 2008, and continued until after her death in August 2013. During that time, there were many trips to the United States of America (USA) for treatment as well as ongoing treatment in Australia. Caring for his wife had a significant impact on Mr Benjamin’s ability to deal with matters. In his affidavit sworn on 17 December 2016, Mr Benjamin said that he had only been able to focus on his financial and business affairs in the last six months of 2016. He had not received any medical treatment for his condition and, with hindsight, believes that he should have taken better care of himself.
In essence, Ms Schilling’s submissions on behalf of the Commissioner were that Mr Benjamin’s second application for an extension of time should be dismissed under s 42B of the AAT Act on the basis that it is an abuse of process, vexatious or has no reasonable prospects of success or on two or more of those bases. She addressed each of them.
Ms Schilling also addressed Mr Mapleston’s submissions referring to authorities including Re Wiegand and Comcare[25] (Wiegand), Re Filsell and Comcare[26] (Filsell), Morales v Minister for Immigration and Multicultural Affairs[27] (Morales), Re M211 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs[28] (M211 of 2003) and my reasons for decision in Re Rana and Military Rehabilitation and Compensation Commission[29] (Rana). There was a significant change of circumstances in those cases that is not reflected in this.
[25] [2014] AATA 413; (2014) 141 ALD 219; 63 AAR 526; Kerr J, President, and Deputy President Bean
[26] [2009] AATA 90; (2009) 49 AAR 506; Deputy President Jarvis I also note that the authorised report of this decision is reported at (2009) 109 ALD 198 but that a comparison of the original copy of the decision, which is consistent with that reported at 49 AAR 506, shows that it incorrectly cites the case of Re Gunawan and Minister for Immigration and Citizenship (Gunawan) (2008) 104 ALD 447; [2008] AATA 645 rather than Re Rana and Military Rehabilitation and Compensation Commission [2008] AATA 558; (2009) 104 ALD 595 at [56]; 213 and [60]; 214 of the report. The case of Gunawan decided whether an applicant for a business visa was using his skills in actively participating at a senior level in day to day management of an Australian business. It did not touch on issue estoppel, res judicata and the like for which the authorised report cites it as authority. Furthermore, the references to Gunawan in the authorised report of the reasons for decision in Filsell make no sense when reference is made, for example, to [108] of Gunawan when it is a 24 paragraph set of reasons for decision.
[27] [1998] FCA 334; (1998) 82 FCR 374; 154 ALR 51; 26 AAR 548; 51 ALD 519; Black CJ, Burchett and Tamberlin JJ
[28] [2004] FCA 660; Crennan J
[29] [2008] AATA 558; (2009) 104 ALD 595; 48 AAR 385
CONSIDERATION
I have considered a number of issues in this matter even though they relate to an application for review of a decision and do not obviously relate to an application for an extension of time within which to lodge such an application. Those wider issues were raised by the parties in their submissions and need to be addressed so that the narrower issue can be considered in the context of the principles that apply generally.
Dismissal under section 42B of the AAT Act
Although the parties focused on s 42B of the AAT Act, I do not think that it can be considered in the context of an application for an extension of time. That is so even though the heading to the provision refers to the “Power of Tribunal if a proceeding is frivolous, vexatious etc.” and a “proceeding” is defined in s 3(1) of the AAT Act in terms broad enough to encompass an application for an extension of time within which to lodge an application for review[30] as well as the application for review itself.[31] I will begin with the words of the section and disregard the heading for the moment.
[30] AAT Act; s 3(1), paragraph (f) of definition of “proceeding”
[31] AAT Act; s 3(1), paragraph (a) of definition of “proceeding”
An application for an extension of time is an application for an extension of the time within which an application for review may be made. Unless and until the time is extended, an application for review of a decision cannot be taken to have been made. Section 42B provides that the “Tribunal may dismiss an application for review of a decision, at any stage of the proceeding …” (emphasis added) if satisfied one or other of the matters described in the three paragraphs that follow. Even though a “proceeding” may include an application for an extension of time, the plain wording of the section shows that the power to dismiss is predicated upon there being an application for review of a decision. Without it, there is nothing to dismiss. Therefore, on the plain words of s 42B(1), the reference to a “proceeding” must be a reference to that application for review. The application for review may be dismissed on one or other of the grounds specified in s 42B(1) provided it is still on foot. That is to say, it may be dismissed at any stage following its lodgement and immediately prior to its being dismissed under s 42A (whether by being withdrawn or discontinued or on another basis), resolved by agreement of the parties under s 42C or 34D or resolved by decision of the Tribunal under s 43 of the AAT Act.
The plain reading of s 42B(1) is reinforced by s 42B(2). Section 42B(2) refers to an “application” on three occasions. On the first, the reference is clearly to an application for review of a decision because s 42B(2) only applies “If the Tribunal dismisses an application under subsection (1) …”. That follows from the fact that s 42B(1) confers power only to dismiss an application for review of a decision. The second reference to an “application” is to “an application by a party to the proceeding”. That is an application requesting that the Tribunal exercise its further power under s 42B(2). That power brings in the third reference to an “application” when it provides that, on such an application by a party to the proceeding, the Tribunal may “… give a written direction that the person who made the application must not, without leave of the Tribunal, make a subsequent application to the Tribunal of a kind or kinds specified in the direction.” The power is clearly not limited to an application for review for s 42B(2) clearly specifies that the Tribunal may make a direction in relation to “a subsequent application to the Tribunal of a kind or kinds specified in the direction.” (emphasis added). An application for review is one kind of “application” but so too is an application under s 29(7) to extend time within which to lodge an application for review. On my understanding of s 42B, therefore, a direction made under s 42B(2) as to future applications could extend to an application for extension of time if, and only if, the Tribunal has first exercised its power to dismiss an application for review of a decision.
I will now return to the heading to s 42B reads: “Power of Tribunal if a proceeding is frivolous, vexatious etc.” (emphasis added). The heading is part of the AAT Act no less than the text of s 42B itself for s 13 of the Acts Interpretation Act 1901 (AI Act) provides that, among other segments, all of the material from and including the first section of an Act to the end of, in the case of the AAT Act, the last Schedule to it, is part of that Act. The heading to s 42B clearly falls within those parameters.
On one reading, the heading to s 42B is drafted in broader terms than its text. It might suggest that the power to dismiss may be exercised if any proceeding is frivolous, vexatious or the like. On another reading, it can be read simply as a broad statement of the subject matter of s 42B and not an attempt to summarise its subtleties.
In the text “Statutory Interpretation in Australia” (Pearce & Geddes), Emeritus Professor Pearce and Adjunct Professor Geddes discuss headings to Parts and Divisions.[32] They make the point that a heading cannot be ignored and can constrain the scope of a section but it may not. Regard must be had to matters such as the context of the section, both immediate and in the enactment as a whole, clarity or ambiguity of drafting and legislative history of the section and of its heading. In conclusion, they refer to the summary of law given by Murray CJ in Ragless v Prospect District Council:[33]
“I think the rules may be stated thus:
1.If the language of the sections is clear, and is actually inconsistent with the headings, the headings must give way.
2.If the language of the sections is clear, but, although more general, is not inconsistent with the headings, the sections must be read subject to the headings.
3.If the language of the sections is doubtful or ambiguous, the meaning which is consistent with the headings must be adopted.”[34]
[32] Pearce & Geddes at [4.52]-[4.53]
[33] [1922] SASR 299
[34] [1922] SASR 299 at 311
Section 42B was inserted in the AAT Act by the Administrative Appeals Tribunal Amendment Act 1993 with its current heading.[35] Neither the Second Reading Speech nor the Explanatory Memorandum to the Administrative Appeals Tribunal Amendment Bill 1992 (Bill) take the matter much further. Read in context, the paragraph from the Second Reading Speech by Senator McMullan would seem to limit the power to dismiss to applications for review. Senator McMullan spoke first of an amendment to s 42A, which provides for the Tribunal to dismiss an application for review in certain circumstances, and then of s 42B:
“Clause 18 of the Bill will amend section 42A to expand the Tribunal’s powers to dismiss applications. The new powers to dismiss matters include the power to dismiss matters for delay in pursuing the application, where there is no reviewable decision, and for failure to appear at a directions hearing or mediation. Section 42A will also expressly provide where a matter has been dismissed the applicant may apply for reinstatement.
At present there is no power for the Tribunal to dismiss an application that is frivolous or vexatious. Such matters, although few in number, are very resource intensive and divert resources away from legitimate applications. The new dismissal powers will also include the power to dismiss an application which is frivolous or vexatious.”[36]
[35] Act No. 31 of 1993; s 17
[36] Senate Hansard; 17 December 1992 at 5280
When s 42B was repealed and substituted by the Tribunals Amalgamation Act,[37] there was a rearrangement of the provision and a clarification of its purpose through the use of more readily understood language. Be that as it may, it is important to note two things. One is that there was no amendment to the heading of the section. The second is that the Explanatory Memorandum accompanying the Tribunals Amalgamation Bill 2014 began its reference to the amendment with the statement at [550] that: “New section 42B would … provide for additional circumstances in which the Tribunal may dismiss an application for review.” (emphasis added) That statement supports my conclusion that the power to dismiss under s 42B(1) is intended to be limited to applications for review. It need not be given anything other than its clear meaning and the heading should be understood as giving a flavour of the provision and of the power it confers rather than as an attempt to influence the clear meaning of the words that follow.
[37] Tribunals Amalgamation Act; s 3 and Schedule 1, Item 116
It follows that I respectfully disagree with the conclusion reached by Ms Taglieri, Member, in Re Wang and Minister for Immigration and Border Protection[38] and to which I was referred. Mr Wang had received approval to become an Australian citizen on condition that, among other things, he participate in a Citizenship Ceremony within 12 months of that approval. He did not do so and, as a consequence, a delegate of the Minister for Immigration and Border Protection (MIBP) decided on 22 May 2012 to cancel his approval. Mr Wang did not lodge an application for review of the cancellation decision within time but applied nearly a year later on 15 April 2013 for an extension of that time. A Tribunal constituted by then Senior Member McDermott refused his application.[39] Ms Taglieri found that Senior Member McDermott’s decision had been emailed on 10 July 2013 to Mr Wang at a Yahoo email address that he had previously provided. Although Mr Wang was then in China and Yahoo did not support its email service in China after August 2013, Ms Taglieri found that, having regard to all of the evidence including that of Mr Wang, he had received the decision and reasons by email on or about 10 July 2013.
[38] [2016] AATA 595
[39] Re Wang and Minister for Immigration and Citizenship [2013] AATA 483
On 21 December 2015, Mr Wang lodged a further application to extend the time within which to lodge an application for review of the MIBP’s cancellation decision dated 22 May 2012. For the purposes of this case, the following paragraphs reflect the essential elements of Ms Taglieri’s reasons:
“14. The law is uncertain as to whether principles of action estoppel, res judicata and functus officio apply to decisions of the Tribunal. [FN 4: Miller v University of New South Wales (2003) 132 FCR 147] For the purpose of determining an application before the Tribunal, it is not necessary to address the uncertainty in detail and reach a conclusive view. I consider that the principles have less relevance and application because of the administrative character of the Tribunal’s decisions. Further, I agree with the views expressed by Deputy President Jarvis in Re Filsell and Comcare. [FN 5: (2009) 109 ALD 198 at 211] In this matter, Section 42B of the Administrative Appeals Tribunal Act 1975, is the preferable mechanism to be applied, to promote integrity of the Tribunal’s processes and finality of decisions (subject to appeal rights).
15-18…
19.Clearly Mr Wang is not aware of the Decision on the first application to extend time. I consider that it would constitute an abuse of process to embark on deciding again what has already been the precise subject matter of the earlier decision. To do so would totally undermine the principles referred to in paragraph 14. There is nothing said or submitted by Mr Wang that persuades me that he ought to be permitted to revisit over two years later exactly the same question determined against him before.
20.His explanations for the delay in seeking to review the cancellation decision are the same now as they were before and he has not advanced new evidence that his substantive case on review would have merit.
21.If Mr Wang had meritorious grounds for appealing the decision to refuse his first extension of time application, the proper and legally correct mechanism for doing so was to seek extension of time to appeal the earlier decision of 10 July 2013. However, there would only have been merit in an appeal if there was demonstrable error of law. [FN 7: Section 44(1) of the Act]
22.For all the above reasons, I conclude that the application dated 21 December 2015 is an abuse of process and is therefore dismissed pursuant to section 42B(1)(c) of the Act.”
I respectfully suggest that these reasons do not address the nature of the Tribunal’s power to dismiss under s 42B. In particular, they do not address the fact that the power is limited to dismissal of an application for review of a decision. Nor do they address the essential difference between making an application for review by complying with s 29 of the AAT Act as modified from time to time by an enactment conferring a right to make an application at all and an application to extend the time within which an application for review must be made. An application for extension of time is effectively an application to modify one of the requirements which are set out in s 29 (or in s 29 as modified by another enactment) and which must be complied with before an application for review of a decision can be said to have been made. Section 42B is based on the premis that an application for review of a decision has been made.
Estoppel, res judicata and functus officio: a selection of authorities
Issues of estoppel, res judicata and functus officio were raised for consideration. Reference was made to various cases including Wiegand, Filsell, Morales, M211 of 2003 and Rana.
Beginning with Wiegand, I note that there are various Tribunal decisions and Federal Court appeals. I do not propose to go over the history but to begin at a point in 2010 when a differently constituted Tribunal had decided that Comcare was liable to pay Mr Wiegand compensation in respect of dysthymic disorder sustained on 20 July 1994 and major depressive disorder from 30 January 1998: Re Wiegand and Comcare[40] (Wiegand 2010). That decision was not taken on appeal. Mr Wiegand disagreed with the decision regarding the date of the injury found by that Tribunal in relation to dysthymic disorder and sought to present further evidence to show that the correct date was a date in in January 1994. Deputy President Jarvis refused his application to tender further medical evidence concluding:
It is clear from the authorities that doctrines such as res judicata, issue estoppel and Anshun estoppel do not apply to proceedings in this tribunal, and that such doctrines are inappropriate to decision-making under legislation such as the SRC Act, which includes provision for Comcare to make reconsiderations of its own motion, as part of a continuing process of administrative decision-making. … [See Re Filsell and Comcare [2009] AATA 90; (2009) 109 ALD 198 and the authorities I there discussed.] It follows from these authorities including Re Matusko, that it would be competent for Mr Wiegand to make a new claim for compensation, notwithstanding the above decision made by the tribunal dated 15 October 2010.”[41]
[40] Re Wiegand and Comcare [2010] AATA 790; Downes J, President, Deputy President Hotop and Professor Reilly
[41] Re Wiegand and Comcare [2012] AATA 623 at [29] (Wiegand 2012)
Mr Wiegand took up Deputy President Jarvis’s suggestion and lodged a further claim with Comcare for dysthymic disorder from an earlier date. Comcare refused his claim and affirmed its decision and Mr Wiegand applied to the Tribunal for review of that reviewable decision. A Tribunal constituted by the President, Kerr J and Deputy President Bean heard Mr Wiegand’s application. It found that there was medical evidence providing some support to Mr Wiegand’s contention that his injury had manifested itself at a date earlier than that found by the Tribunal after the previous hearing and decided that he was permitted to produce fresh evidence. The Tribunal then advised the parties that it wished to hear submissions regarding whether it had jurisdiction to permit relitigation of the issue regarding date of the onset of Mr Wiegand’s injury and, if so, what principles should govern whether or not to allow that course.
The submissions and the Tribunal’s response are in the following paragraphs of its reasons for decision:
“ Counsel for the respondent, Mr Dubé, responded that there appeared to be no direct authority on the question as to whether, standing alone, the date of an injury could be relitigated but submitted that, in principle, on the authority of Telstra Corporation v Hannaford [2006] FCAFC 87; (2006) 151 FCR 253 the Tribunal must be accepted to have the necessary jurisdiction in the case of decisions made under the SRC Act. Nor did any formal estoppel prevent the Tribunal, in appropriate circumstances, from proceeding to do so. The Tribunal had discretion, to be exercised according to principle, as to whether or not such a course should be permitted. Mr Wiegand, unsurprisingly, agreed. While jurisdiction is a threshold issue, the Tribunal has no reason to doubt those conclusions and it has proceeded on that basis.
Mr Dubé accepted the proposition put to him by Deputy President Bean that the Tribunal’s decision in Re Matusko and Australian Postal Corporation [1995] AATA 14; (1995) 21 AAR 9 at 20 [35][[42]] usefully and correctly summarised the considerations appropriate to the exercise of that discretion. There the Tribunal had said:
[42] Senior Member Dwyer and Members MacLean and Shanahan
From the authorities cited we conclude:
(a)No formal issue estoppel arises from the Tribunal’s findings in Re Matusko 1991,
(b)The Tribunal should not generally allow relitigation of issues already decided,
(c)But the Tribunal should use its flexible procedures to allow further consideration of issues where there is a reason to do so, for instance:
(i)where there is a different decision,
(ii)where there is a clear legislative intent,
(iii)where the reconsideration decision is not final,
(iv)where there has been a change in circumstances or fresh evidence, or
(v)where justice to the parties requires a departure from the general rule.”[43]
[43] [2014] AATA 413; (2014) 141 ALD 219; 63 AAR 526 at [18]-[19]; 224-225; 531
The Tribunal did not analyse the basis on which it proceeded i.e. accepting that it had jurisdiction, the basis on which it decided that it had a discretion to consider whether or not it would consider what it described as a relitigation of the date of the injury. Its reference to the case of Telstra Corporation v Hannaford[44] (Hannaford) does not assist for, as I explain in the following two paragraphs, that case was concerned solely with the issue of jurisdiction. It was not concerned with the basis on which, if the Tribunal has jurisdiction, the circumstances in which it may decline to exercise that jurisdiction and, if so, how the means by which it declines or, if it exercises it, when it may rely on findings of fact made in an earlier decision of the Tribunal. I respectfully suggest that it appears to have conflated what are separate issues.
[44] [2006] FCAFC 87; (2006) 151 FCR 253; 43 AAR 105; 90 ALD 263; Heerey, Dowsett and Conti JJ
Hannaford raised issues arising under the Safety Rehabilitation and Compensation Act 1988 (SRC Act). Under s 14 Telstra Corporation Ltd (Telstra) had accepted liability for Mr Hannaford’s Ross River fever and paid him compensation for medical expenses under s 16 and incapacity for work under s 19. Later, on the basis of medical evidence showing that Mr Hannaford no longer suffered from Ross River fever, Telstra decided that it was not liable to pay any further compensation and affirmed its decision under s 62. Mr Hannaford had argued that, on review of the decisions that were made under ss 16 and 19, the Tribunal did not have jurisdiction to make a finding of fact contrary to that made in the original determination under s 14 that he suffered from Ross River fever.
The Full Court concluded that, in reviewing the decisions under ss 16 and 19 and/or under ss 21 or 27 of the SRC Act, the Tribunal could make that contrary finding. As Conti J explained:
“… The statutory scheme allows for progressive and evolving decision-making giving effect to the provisions of ongoing review of relief or entitlements in the nature of course of workers compensation, being review which allows for adjustment or change in the light of events or circumstances which may subsequently happen. The statutory scheme hence reflects a flexible scope for adjustment by way of decisions in the nature of awards to be made subsequently to the determination of s 14 liability, whether that determination be made in isolation, or in the context of decision-making concerning consequential relief that may be required in the light of evolving circumstances. It is therefore a scheme which allows progressively for ongoing relief …”.[45]
[45] [2006] FCAFC 87; (2006) 151 FCR 253; 43 AAR 105; 90 ALD 263 at [57]; 273; 125; 282-283 per Conti J with whom Dowsett J agreed and see also [9]-[11]; 255-256; 107; 265 per Heerey J
Like Wiegand, Matusko was a case in which Mr Matusko had previously lodged a claim for compensation that had been determined, the determination reviewed under s 62 of the SRC Act and, following his application to it, the reviewable decision reviewed by the Tribunal. In Mr Matusko’s case, he had been unsuccessful but, like Mr Wiegand, he then lodged a further claim in respect of the same condition. Mr Matusko claimed compensation and Mr Matusko sought alteration of the date on which he was found to have suffered an injury. When his claim was refused and the refusal affirmed, he applied to the Tribunal for review of that decision.
In deciding not to dismiss Mr Matusko’s second application under s 42B, the Tribunal gave a summary of its reasons:
“(i) Re Matusko 1991 did not create any issue estoppel as a matter of law,
(ii)The fact that the Tribunal expressed concern about the preparation and presentation of Re Matusko 1991 provides a reason why the Tribunal should not now apply any estoppel as a matter of policy but should use its flexible procedures to do justice between the parties and, where it appears that there may be further relevant evidence, should allow that evidence to be called,
(iii)This application seeks a review of a fresh reviewable decision (Plumb v Comcare),
(iv)This application covers a period not covered by the decision in Re Matusko 1991,
(v)Because s 62 of the Act provides a power to reconsider a determination, in appropriate circumstances, whether or not a matter has been before this Tribunal, Re Matusko 1991 is not necessarily a final determination.”[46]
[46] [1995] AATA 14; (1995) 21 AAR 9 at [43]; 23
Filsell was also a case of a claim for compensation that ultimately became the subject of a decision of the Tribunal, albeit by consent under s 42C of the AAT Act, and a further claim for a similar condition followed by a refusal of the claim. Mr Filsell did not apply to the Tribunal for review of the refusal when it was affirmed on reconsideration. He did apply to the Tribunal when Comcare subsequently revoked its own decision and substituted a decision refusing the claim on the basis that its liability had been finally determined in the context of Mr Filsell’s first claim and subsequent decision made by consent by the Tribunal. The headnote to the report in 49 AAR 506 accurately summarises the reasons for decision given by Deputy President Jarvis:
“(1) The present proceedings arise from an application to review a different reviewable decision made by Comcare, namely the reconsideration on own motion made in September 2007. The Tribunal has not reviewed that decision, and accordingly is not precluded from doing so by the doctrine of functus officio.
(2) The consent decision is not invalidated because it refers to the wrong section of the AAT Act, nor because of the invalid reference in the minutes.
(3) The current proceedings are not barred by the doctrines of res judicata, issue estoppel or Anshun estoppel.
(4) The Tribunal is not satisfied, in view of the fresh medical evidence now available, that the consent decision means that the present application for review has no reasonable prospect of success. The proceedings should not, therefore, be dismissed under s 42B of the AAT Act.”[47]
[47] (2009) 49 AAR 506 at 507
In the course of his reasons and subject to one qualification, Deputy President Jarvis expressed his agreement with my earlier decision of Rana,[48] in which I concluded that estoppel has no place in the Tribunal and emphasised the importance of considering the statutory regimen defining its role in a particular matter. His qualification related to my analysis at [100] of my reasons relating to functus officio. That paragraph depends on its previous analysis and so I will set out the two preceding paragraphs to give a flavour of its context:
“… [T]he Tribunal’s role is to “ascertain what rights and obligations should exist”.[49] That role is played out against a framework that includes a statutory regimen according to which such things as entitlements, rights, duties and powers are conferred or imposed. That statutory regimen sets the limits of those entitlements, rights, duties and powers. The Tribunal’s role is also defined by the statutory regimen. That means that the Tribunal’s decisions cannot be made about any dispute that a person happens to have or happens to attempt to bring to the Tribunal. Its decisions must be related to the correctness or, if a discretion must be exercised in making the decision, the appropriateness of decisions that have been made under enactments and that the Tribunal has been given the power to review.[50] In a case such as this, the Tribunal has jurisdiction to review decisions that are reviewable decisions[51] and so decisions made under either ss 38(4) or 62 of the 1988 Act.[52] A decision under s 38(4) is a decision made after Comcare has reviewed a determination in relation to, in essence, a claim for rehabilitation.[53] A decision under s 62 is made after Comcare has reconsidered determinations or requirements made under various sections relating to claims for compensation.[54]
Where a person is given the liberty to apply to the Tribunal by an enactment and does in fact apply, that person has a right to have the application determined by the Tribunal.[55] The duty that is imposed upon the Tribunal must be to review the particular decision of which review is sought and in relation to which the Tribunal is given jurisdiction. Once it has done so in accordance with its statutory authority and power, it seems to me that the Tribunal has done all that it can lawfully do. It is functus officio. Subject only to judicial review or an application to the Federal Court under s 44 of the AAT Act, its decision stands. It stands as the determination of the entitlements and obligations and rights and duties of the parties in relation to the issues that are the subject of that decision made against a particular statutory framework. Given the statutory limits on the Tribunal’s power, it can decide no wider issues.
This means that when the Tribunal is faced with a submission that it is prevented from reviewing a decision because it has already done so, it must analyse the earlier decision and the decision of which review is sought to determine whether it truly has done so. If it has done so, its power is exhausted because it can only exercise the power once before it is exhausted. This approach seems to me to have been at the heart of the judgments by the Full Court of the Federal Court in Plumb v Comcare, by Davies J, with whom Spender J agreed on this point, in Sande and by Pincus J in Bogaards v McMahon. It is an approach that does not need to have regard to the principles of res judicata or cause of action estoppel, Anshun estoppel or issue estoppel. It is an approach that analyses the nature of the decision and looks to whether the Tribunal has considered that decision, as distinct from the issue that was the subject of the decision, at an earlier time. The decision of which review was sought in Bogaards v McMahon was a decision made by the CEC in accordance with directions given by the Tribunal in reviewing an earlier decision. To permit review of the last decision would be, in effect and in substance, to review its own decision. That is not a decision in respect of which the Tribunal is given jurisdiction. Once the Tribunal had made a decision remitting the matter to the CEC, it had exhausted its function and was functus officio. If the applicant was unhappy with the state of affairs, he had a right to take the Tribunal’s decision to the Federal Court. He had no right to take the CEC’s determination that was merely implementing the Tribunal’s decision.”[56]
[48] [2009] AATA 90; (2009) 49 AAR 506 at [56]; 521
[49] Precision Data Holdings Ltd v Wills (1991) 173 CLR 167; 104 ALR 317 at 189; 326
[50] AAT Act, s 25
[51] 1988 Act, s 64
[52] 1988 Act, s 60(1)
[53] 1988 Act, s 38(4)
[54] 1988 Act, s 60(1)
[55] Esber v Comcare (1992) 174 CLR 430; 106 ALR 577; [1992] HCA 20 at ; 583; [21] per Mason CJ, Deane, Toohey and Gaudron JJ
[56] [2008] AATA 558; (2009) 104 ALD 595; 48 AAR 385 ay [98]-[100]; 629-630; 422-423
Deputy President Jarvis said at [56] that his reasons for disagreeing with [100] of Rana were at [43] of his reasons for decision. In [43], he said:
“ However, the present proceedings arise from an application to review a different reviewable decision made by Comcare, namely the reconsideration on own motion made in September 2007. Mr Filsell was entitled by virtue of s 64 of the AAT Act [sic] to apply for review of that decision. This Tribunal has not reviewed that decision, and accordingly is not precluded from doing so by the doctrine of functus officio: Plumb v Comcare (1992) 39 FCR 236 at 240-241; 17 AAR 1 at 6-7.”[57]
[57] [2009] AATA 90; (2009) 49 AAR 506 at [43]; 517
Where the disagreement lies between Deputy President Jarvis’s reasoning and mine remains a mystery to me. Both of us have looked to the particular decision in relation to which the application for review was lodged and determined whether or not the Tribunal has exercised its powers in relation to that particular decision. On the particular facts of each case, we reached the same conclusion i.e. that the particular decision had not been reviewed by the Tribunal even though it had reviewed decisions to the same effect on earlier claims made by, in one case, Mr Filsell and, in the other, by Mr Rana. Different factual situations need to be analysed individually as illustrated by the cases to which I referred in the extract from Rana. It is also illustrated by a case such as Morales where the Tribunal’s earlier decision had been set aside on appeal by Sackville J in Morales v Minister for Immigration and Ethnic Affairs.[58] That meant that nothing of the Tribunal’s earlier decision remained so that there was no foundation on which an argument regarding either estoppel or functus officio could be based.[59]
[58] [1995] FCA 1688; (1995) 60 FCR 550; 41 ALD 71
[59] [1998] FCA 334; (1998) 82 FCR 374; (1998) 154 ALR 51; 26 AAR 548; 51 ALD 519 at 387-388; 63-64; 561-562; 532-533
In summary, the initial question to be considered is whether the Tribunal has jurisdiction in relation to the particular type of decision of which review is sought. That is determined in the first instance by reference to s 25 of the AAT Act and the particular provisions of the enactment providing that an application may be made to the Tribunal. If it has jurisdiction in relation to that particular type of decision, the next question – and it usually does not arise – is whether the Tribunal has previously exercised its jurisdiction in relation to that particular decision of which review is sought. That requires consideration again of the relevant statutory framework, of the particular decision that has been made and whether the Tribunal has previously exercised jurisdiction in relation to that particular decision as opposed to a decision to similar effect.
Power to decline to review a decision or to limit scope of review
The Tribunal’s jurisdiction to consider an application for review is one thing but jurisdiction does not necessarily mean that it must review the decision that is the subject of the application or that it need consider every aspect of that decision. The application may be dismissed under s 42B of the AAT Act or the scope of the matters reviewed limited in some circumstances. I will not consider s 42B in any detail in this matter for it is not a power that can be exercised in the context of an application for an extension of time. I will consider the Tribunal’s power to limit the scope of the review for it is not relevant both in reviewing a decision and in considering an application for an extension of time.
Limiting the scope of the review is an issue in Rana and I rely on my analysis of it but will set out only a portion of it for the purposes of this case:
"126. I do not consider that Mr Rana is entitled to regard his application in the Tribunal as opening up for consideration all of the issues that have been considered and decided by previous Tribunals. He cannot again produce all of the evidence regarding his employment in the Army or all of the medical evidence about the other conditions from which he suffers or claims to suffer. Instead, he will be restricted in the evidence that he can call. I will come to those restrictions shortly but, for the moment, will set out my reasons for imposing them.
127. In Morales v Minister for Immigration and Multicultural Affairs, it was the view of the Full Court that:
‘… the essentially administrative nature of the tribunal’s function and the nature of its task in looking to the correct or preferable decision, in circumstances where it is to have regard among other things to the dictates of fairness, point to the conclusion that the tribunal may, in appropriate circumstances, conclude that a previous decision should be applied again as the correct and preferable decision when it is sought to revisit the earlier decision at some later time. Of course, the circumstance that a court has set aside an entire decision may mean that it is either impermissible, or quite inappropriate, to adopt such a course but that would necessarily be the case where, as here, a particular determination had not itself been the subject of challenge.’
128. This is a different approach from that taken by the Tribunal in Re Matusko, which relied on the ‘flexible procedures’ permitted by s 33 of the AAT Act. Rather, it seems to be an approach based not so much on procedures but on the evidence to which the Tribunal may have regard. It seems to be an approach that is based more on s 33(1)(c), which provides that:
‘the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate.’
129. Since Morales v Minister for Immigration and Multicultural Affairs was decided, the AAT Act has been amended by the enactment of s 2A. It provides that:
‘In carrying out its functions, the Tribunal must pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick.’
Its inclusion in the AAT Act reinforces the Full Court’s reference to what may be the dictates of fairness.”[60]
[60] [2008] AATA 558; (2009) 104 ALD 595; 48 AAR 385 at [126]-[129]; 637; 431-432
The principles set out in Morales are also reinforced by s 25(4A) of the AAT Act, which was in force when I decided Rana. It relates only to an application for review of a decision when it provides that:
“The Tribunal may determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues that it considers.”
The next issue to consider is whether the Tribunal may limit its scope of review by having regard to the findings of fact or even any interim decisions made by it on issues that must be decided in the course of reaching the ultimate decision, whether differently constituted or not, in relation to the earlier application. If the Full Court’s judgment in Morales is to be understood in light of s 33(1)(c) and in light of s 2A, it seems to me that the principles it has applied are equally applicable to a consideration of an application for an extension of time. Neither of those provisions is drafted in terms restricting it to applications for review of decisions. Both are of more general application. I have already set out s 33(1)(c) at [128] of my reasons for decision in Rana and set out at [….] above. It is addressed to a “proceeding” and not to any particular proceeding. Therefore, it is wide enough to encompass all of the meanings given to that word in its definition in s 3(1). Section 2A is also broadly based in setting out the Tribunal’s objective in carrying out its “functions”. Its functions include not only the resolution of applications for review of decisions by decision after an alternative dispute resolution process or hearing as the case may be but for all matters associated with those applications and their resolution. Section 2A provides that:
“In carrying out its functions, the Tribunal must pursue the objective of providing a mechanism of review that:
(a) is accessible; and
(b) is fair, just, economical, informal and quick; and
(c) is proportionate to the importance and complexity of the matter; and
(d) promotes public trust and confidence in the decision-making of the Tribunal.”
(emphasis added)
Application of principles to Mr Benjamin’s matter
In Mr Benjamin’s matter, the Commissioner’s reviewable objection decision has not been reviewed by the Tribunal. Therefore, in relation to its jurisdiction to review that decision, the Tribunal cannot be said to have exhausted its powers and so be functus officio in relation to the merits of the decision.
Had Mr Benjamin sought to lead further evidence on his first application for an extension of time and so re-open it, I would have concluded that I was functus officio in relation to that application. Senior Member Fice exercised all of the Tribunal’s power in relation to that application when he gave his decision on it.
As matters stand, Mr Benjamin did not take that course. Instead, he lodged a second application for an extension of time when his first was unsuccessful. His second application for an extension is an entirely fresh application. It has not been considered by the Tribunal in the past. There is nothing in the AAT Act that suggests that a person may not make a further application if the first is not successful. That means that I must consider Mr Benjamin’s second application according to the normal principles but, in view of ss 2A and 33(1)(c) as well as the principles enunciated by the Full Court in Morales, I will need to consider whether I have regard to the views previously expressed by Senior Member Fice.
Principles relating to determination of an application for an extension of time
The search for those boundaries is made in light of principles established by the courts. I refer in particular to those set out by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen[61] (Hunter Valley) and to the six factors that he distilled as relevant in the Court’s considering an application for extension of time under s 11 of the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) rather than s 29 of the AAT Act. Section 11(1)(c) of the ADJR Act permits an application to be lodged “… within such further time as the court concerned … allows” but does not prescribe any criteria or principles guiding the exercise of that discretionary power. It is very similar to the discretionary power given to the Tribunal by s 29(7).
[61] [1984] FCA 176; (1984) 3 FCR 344; 58 ALR 305; 7 ALD 315 at 348-349; 310-311; 320
His Honour’s first factor[62] was modified by the Full Court of the Federal Court in Comcare v A’Hearn[63] although in the context of the AAT Act. Allowing for that modification, the factors were summarised by Federal Magistrate McInnis, as he then was, in Phillips v Australian Girls’ Choir Pty Ltd & Anor[64] (Phillips) when he said:
[62] It read in part that “It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an ‘acceptable explanation of the delay’ and that it is ‘fair and equitable in the circumstances’ to extend time …”: [1984] FCA 176; (1984) 3 FCR 344; 58 ALR 305; 7 ALD 315 at 348; 310-311; 320
[63] [1993] FCA 498; (1993) 45 FCR 441; 119 ALR 85
[64] [2001] FMCA 109
“1. There is no onus of proof upon an applicant for extension of time though an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied it is proper to do so. The ‘prescribed period’ of 28 days is not to be ignored (Ralkon v Aboriginal Development Commission (1982) 43 ALR 535 at 550).
2. It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given. It is to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential pre-condition (Comcare v A’Hearn (1993) 45 FCR 441 and Dix v Client Compensation Tribunal (1993) 1 VR 297 at 302).
3. Action taken by the applicant other than by making an application to the court is relevant in assessing the adequacy of the explanation for the delay. It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised. (See Doyle v Chief of Staff (1982) 42 ALR 283 at 287).
4. Any prejudice to the respondent, including any prejudice in defending the proceeding occasioned by the delay, is a material factor militating against the grant of an extension. (See Doyle at p 287).
5. The mere absence of prejudice is not enough to justify the grant of an extension. (See Lucic at p 416).
6. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted. (See Lucic at p 417).
7. Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of exercise of the court’s discretion (Wedesweiller v Cole (1983) 47 ALR 528).”[65]
[65] [2001] FMCA 109 at [10]
In Budd v Secretary, Department of Education, Employment and Workplace Relations,[66] Cowdroy J approved and applied these factors in the context of s 44(2A)(a) of the AAT Act. Section 44(2A) provides that an appeal to the Federal Court instituted under ss 44(1) or (2) shall be instituted within 28 days of the day on which a person is given a document setting out the terms of the decision or within such further time as the Court allows.
[66] [2008] FCA 1540 at [18]-[19]
I also adopt the seven principles identified in Phillips but would add three paragraphs explaining the sixth principle. Two are based on the judgment of Hill J in Brown v Federal Commissioner of Taxation[67] (Brown) when he commented upon the relevance of particular principles set out in the Hunter Valley case to an application for an extension of time under the TAA. The third is based on the judgment of the Full Court of the Federal Court on appeal from the judgment of Hill J. They are:
(1)Whether a would be applicant has an arguable case represents “... quite a low threshold. What is involved is whether the objection on its face discloses a case which is arguable, not whether having regard to other matters, including evidence which may not even be known to the taxpayer at the time of making the application, the case is one that the taxpayer will or will probably lose.”[68]
(2)“… No doubt if the objection on the face of it is one which is frivolous or bound to fail as a matter of law it would be a futility to permit an extension of time to enable it to be considered. …”[69]
(3)“… We wish to make it clear, however, that the AAT is not precluded from taking into account the apparent strength or weakness of taxpayer’s case, when determining whether an extension of time should be granted, if the overall circumstances are such that the apparent strength or weakness of that case is properly to be regarded as a material consideration. In the present case, for example, while the AAT should not have resolved the application by rejecting the taxpayer’s evidence as unworthy of belief, it could have taken into account the obvious difficulties confronting the taxpayer’s claim when deciding whether, in the light of all the circumstances, an extension of time was appropriate. …”[70]
[67] [1999] FCA 563; (1999) 99 ATC 4516; (1999) 42 ATR 118
[68] [1999] FCA 563; (1999) 99 ATC 4516; (1999) 42 ATR 118 at [56]; 4527; 131
[69] [1999] FCA 563; (1999) 99 ATC 4516; (1999) 42 ATR 118 at [56]; 4527; 131
[70] Federal Commissioner of Taxation v Brown [1999] FCA 1198; (1999) 99 ATC 4852; 42 ATR 672 at [28]; 4860; 680-681
I would also add the following caution set out in Griffiths J, with whom Edmonds J agreed, in Mentink v Minister for Home Affairs,[71] regarding the application of the principles in Hunter Valley:
“First, it is important not to lose sight of the fact that the matters are not exhaustive. They were intended to provide only general guidance in the exercise the relevant discretion. As French J (as his Honour then was) pointed out in Seiler v Minister for Immigration, Local Government and Ethnic Affairs [1994] FCA 878; (1994) 48 FCR 83 at 97 in respect of the matters or criteria identified by Wilcox J:
His Honour did not purport to set out an exhaustive list of the criteria to be considered in an application for an extension of time. Nor should the propositions contained in the judgment be elevated into rules of law fettering the discretion. They identify factors relevant to the exercise of the power and approaches to their consideration. In each case the discretion must be exercised with regard to all the circumstances.”[72]
[71] [2013] FCAFC 113; Edmonds, Griffiths and Pagone JJ
[72] [2013] FCAFC 113 at [36]
In the context of merits review in the Tribunal, reference needs to be made to s 2A of the AAT Act. I have set that provision out at [….] above. It does not have an equivalent in the ADJR Act, to which Wilcox J referred in setting out relevant principles or in the Federal Court of Australia Act 1976 or in the Federal Circuit Court of Australia Act 1999, which apply in one or other of the two Courts that would be expected to hear an application under the ADJR Act. It is a provision of a sort that is, as the High Court concluded in relation to s 420 of the Migration Act 1958, “… intended to be facultative, not restrictive …”[73] or, as Lindgren J said in Sun Zhan Qui v Minister for Immigration and Ethnic Affairs,[74] one of the “general exhortatory provisions”.
[73] Minister for Immigration and Multicultural Affairs v Eshutu [1999] HCA 21; (1999) 197 CLR 611; 162 ALR 577; 54 ALD 289; 73 ALJR 746 at [49]; 628; 588; 301; 754-755 per Gleeson CJ and McHugh J and [158]; 659; 613; 326; 773 per Hayne J and see also similar views expressed by Gaudron and Kirby JJ at [69]-[77]; 633-635; 592-594; 305-307;757-759
[74] [1997] FCA 324
A facultative and non-restrictive approach was advocated by Davies J, with whom Black CJ agreed, in Chalk v Commissioner for Superannuation[75] when he said that:
“Most provisions which authorise an extension of time are instances of beneficial legislation which, accordingly, should be applied beneficially. With respect to such discretions in rules of court, Reynolds, Hutley and Bowen JJA said, in Outboard Marine Australia Pty Ltd v Byrnes: Bauknecht (Third Party) [1974] 1 NSWLR 27 at 30:
‘We appreciate that the rules of court, particularly those relating to time, should never be allowed to be an instrument of tyranny. They do, however, have purposes, one of which is that the parties may know where they stand and regulate their affairs accordingly. It is also appreciated that where genuine issues ought to be litigated, if such can be done with fairness to all concerned, it is appropriate to take a benign view of applications to extend time.’
Those remarks indicate the importance of forming a view as to whether it is in the interests of justice that time be extended...”[76]
[75] [1994] FCA 1063; (1994) 50 FCR 150; 33 ALD 420; 19 AAR 450
[76] [1994] FCA 1063; (1994) 50 FCR 150; 33 ALD 420; 19 AAR 450 at 155; 425; 455-456
Similar sentiments were expressed by McHugh J in the High Court in Brisbane South Regional Health Authority v Taylor:[77]
“Even where the cause of action relates to personal injuries …, it will be often just as unfair to make the shareholders, ratepayers or taxpayers of today ultimately liable for a wrong of the distant past, as it is to refuse a plaintiff the right to reinstate a spent action arising from that wrong. The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible …
In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. The purpose of a provision such as s 31 is ‘to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced.’… But whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension.”[78]
[77] [1996] HCA 25; (1996) 186 CLR 541; 139 ALR 1; 70 ALJR 866; Dawson, Toohey, McHugh and Gummow JJ; Kirby J dissenting
[78] [1996] HCA 25; (1996) 186 CLR 541; 139 ALR 1; 70 ALJR 866 at 553-554; 9-10; 871-872 (footnotes omitted)
Consideration of Mr Benjamin’s second application for an extension of time
Application of the Morales principle
In keeping with the principles expressed in Morales, it seems to me that the dictates of fairness would mean that I should not reach a conclusion different from that reached by Senior Member Fice. The only matter that has been raised and that is different from those before him is Mr Benjamin’s evidence relating to the not inconsiderable delay in lodging an application. He has put forward additional evidence regarding his state of mind and the effect that it had on his ability to manage his taxation affairs. For the reasons I give below, I do not place great weight on that additional evidence and do not consider that Mr Benjamin’s evidence is supported by the other evidence. As for issues of the merits of an application for review, should he be permitted to lodge it, Mr Benjamin has not raised any fresh ground and relies on his previous submissions. He has not taken his submissions regarding prejudice further other than to underline the prejudice to him if bankruptcy proceedings continue against him in relation to a taxation debt which has not been independently tested on external review. Interests of fairness and justice would, I consider, justify my relying on Morales and not independently considering each element raised by Mr Benjamin’s application for an extension of time or reconsidering the matter generally. I would refuse Mr Benjamin’s application for an extension of time within which to lodge an application.
Consideration of the application
I have considered Mr Benjamin’s application for an extension according to the principles set out in the authorities to which I have referred. I will begin with the reasons for a delay in lodging the second application that exceeds eight years, consider the merits of Mr Benjamin’s case if I were to grant his application for an extension and prejudice to the parties.
Mr Benjamin has moved away from his original argument that he did not receive the Commissioner’s objection decision dated 15 February 2008 and given evidence about his mental state. Mr Benjamin has described himself as suffering from depression and grief until six months ago. During his late wife’s illness, he had cared for their then young daughter. The need to focus on her and on his wife had a deleterious effect on his business interests and those of his wife. At the time of the first application for an extension of time, Mr Benjamin said that he had not been aware that he had been, and continued to be, depressed and grief stricken.
While I can well understand the stresses and anxiety as well as financial burdens that illness of a close family member can bring, I also understand that not every person experiences that stress and anxiety in the same way. Stresses and anxiety can lead to diagnosable psychiatric conditions in certain situations but Mr Benjamin’s evidence of his own condition and the effect on him is not supported by professional medical evidence of any sort. Quite apart from any specialist report, he has not provided a note from his own General Practitioner regarding his state or from his late wife’s. Mr Benjamin has said that he suffered from these conditions from some time before 2008 until after his late wife’s death in 2013 and spoke of the effect on his business interests up until a point some six months ago.
Mr Benjamin’s evidence is inconsistent with the evidence of his having been first appointed as either or both a director and the secretary of five companies in the period from 2012 to 2015. I have referred to those appointments at [23] above and note that he continues to hold those appointments on the evidence that I have. There is no other evidence relating to them or to their business activities but, even if they are not actively engaged in a business enterprise of some sort, Mr Benjamin’s appointment as either a director or as their Secretary or both carries with it responsibilities that must be fulfilled under the Corporations Act 2001. To accept appointment in those circumstances points to his considering himself capable of carrying out those responsibilities.
I also note that Mr Benjamin accepted further appointments to those positions in a number of other companies in the period of his late wife’s illness. I note that, between 2005 and 2013, Mr Benjamin was appointed to and held positions for varying lengths of time in thirteen different companies. They are companies different from those to which I have referred in the previous paragraph. Again, he would have had responsibilities in relation to those companies.
In relation to a further seven companies, Mr Benjamin already held appointments as a director or as the Secretary from a date preceding the diagnosis of his wife’s illness in 2004. He continued to hold those positions for varying periods during the period of her illness. In the case of five of them, the appointments came to an end in 2004 but two of them continued into 2007 and one into 2013. Again, Mr Benjamin would have had responsibilities in relation to these companies during his wife’s illness.
During these same years, I note also that Mr Benjamin was able to instruct Davey Accountants in April 2008 to lodge objections to the Commissioner’s assessments or amended assessments. This preceded the period from 11 September 2008 to 24 October 2008 when I find that he and his wife were in the USA while she received treatment but post-dated by three or four years the diagnosis or onset of her condition. The dates to which I refer are those shown on the accommodation account exhibited to Mr Benjamin’s affidavit sworn on 12 October 2015. Those dates are consistent with the invoices sent by the Strong Memorial Hospital.
Finally, I note that, although he states that his condition has prevented him from focusing on his affairs until some six months ago, I note that Mr Benjamin was able to instruct his solicitor in August 2015 to lodge first an application for review of the Commissioner’s decision and then an application for an extension. He was able to instruct him to lodge an appeal against Senior Member Fice’s refusal of his application for an extension. These events occurred more than six months ago. I do not pay them any heed, though, for they post-date his first application. Of greater concern to me is the four month delay between 1 April 2015, when he says he first saw the Commissioner’s objection decision and 20 August 2015 when he first lodged an application for review without an application for an extension of time within which to do so and then 24 August 2015 when he did lodge that application for an extension. This was some two years after his wife’s death and at a time when he was still a director and/or the Secretary of various companies.
Having regard to all of these matters, I am not satisfied that Mr Benjamin has given a satisfactory explanation of a seven year delay in lodging an application for review. The further delay of a year is explicable by the appellate proceedings but I am not satisfied that the delay over the first seven years has been satisfactorily explained.
I have very little regarding the merits of the application. Counsel’s opinion is an opinion expressed on the instructions given to him. On my reading of his Opinion, the instructions assumed that the payments were made in consequence of a family settlement. In any event, an Opinion is not evidence of the arrangements that were made. The only evidence that I have is the Deed of Settlement and the letter to Mr Terry Benjamin from Mr Benjamin’s solicitors, Logie-Smith Lanyon. The letter is written in the context of Mr Benjamin’s assertion and understanding that he, his brother and others were engaged in a joint commercial venture intended to generate a profit for those involved in it.
There is nothing in the Deed of Settlement that contradicts the flavour of Logie-Smith Lanyon’s letter. Indeed, the recital clause in that Deed begins with a statement that Mr Terry Benjamin, Mr Benjamin and others are involved in the development of a project known as “The Domain Ballarat” and which it calls the “Development”. Further statements in the recital clause read:
“(c) A dispute has arisen between JRB [Mr Benjamin] and MGI [Mr Benjamin’s late wife] on the one hand and TMB [Mr Terry Birmingham] … Benbrook [Benbrook Homes Pty Ltd referred to as “Ben Brook Homes Pty Ltd” in Logie-Smith Lanyon’s letter] … on the other hand in relation to the Development, and allegations have been against and by each of the parties.
(d)A dispute has arisen between JRB on the one hand and TMB … on the other hand in relation to the property and allegations have been against and by each of the parties.
(e)For the avoidance of further expense, time and legal proceedings the parties have agreed to release each other and abandon all claims they might have against each other now and in the future on the basis of terms set out in this Deed.”
Mr Benjamin has stated that the Deed of Settlement was reached to resolve a long-standing family issue. It is not the time to resolve whether it was or was not but he has not put forward either further evidence that might contradict the assertions made in the recital clause in the Settlement Deed or outlined an argument that, if supported by evidence in due course, might be open to him. A mere assertion that it was a settlement of private family matters does not, in light of the Logie-Smith Lanyon letter and the Deed of Settlement, lead me to conclude that he would have reasonable prospects of success.
After this period of time, there is prejudice to all concerned if all the relevant documents cannot be located. Ms Vandenhurk’s affidavit shows that the ATO has been unable to locate tender documents that might be relevant. Mr Benjamin’s solicitors referred to Mr Benjamin’s being involved in the tender process and gathering together a team of experts. That may well be relevant to a review of the decision.
Mr Benjamin may well consider himself to be prejudiced if I do not grant his application. The Commissioner will be able to continue to take action to recover the debt arising from his objection decision. Mr Benjamin will be able to take action in that context but will not be able to challenge the fact of the debt or its amount. That said, it cannot be said that his not being able to do so is unfair to him. He had an opportunity to seek review of the objection decision when it was made. I realise that he said that Davey Accounting was no longer acting for him after he lodged his objections in 2008 but, in view of his corporate experience and knowing that the objections had been lodged, he could be expected to have pursued the Commissioner for a decision on his objections long before 2015 when he said that he first became aware that a decision had been made. His wife’s illness would have been an extremely sad and trying time for him and for their daughter but, as I have said, he was able to continue with activities relating to a number of corporate activities in that time. On the evidence, there is no basis why he could not have given attention to his own taxation affairs.
The taxation system is directed to a determination of the amount of taxation that each taxpayer owes. It is a system that makes provisions for returns by each taxpayer, assessments, audits and amended assessments by the Commissioner and for review of those assessments. It is a system that is directed to a final outcome of the amount of taxation payable and to finality of that outcome. There is flexibility allowed in the scheme to cater for circumstances in which fairness requires a deviation from the system. An extension of time within which to apply for review of the Commissioner’s objection decision is one of those deviations. In this case, however, I am not persuaded by Mr Benjamin’s reasons for his considerable delay, the prospects of success of his application, prejudice that he would suffer and any sense of fairness that the time within which he may lodge an application for review of the Commissioner’s objection decision should be extended.
DECISION
For these reasons, I have decided to refuse to grant Mr Benjamin’s application for an extension of time within within which to lodge an application for review of the respondent’s reviewable objection decision dated 16 September 2008.
I certify that the ninety-seven preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie.
Signed: ……….........[sgd]..............................
Associate
Date of Hearing 21 December 2016
Date of Decision 19 January 2017
Solicitors for the Applicant Mr James Mapleston and Mr John Mapleston
James D. Mapleston, Barrister & Solicitor
Counsel for the Respondent Ms Meredith Schilling
Solicitor for the Respondent Mr Aaron Elbourne
ATO Review and Dispute Resolution
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