Bristrol Custodians Ltd v Chief Commissioner of State Revenue
[2012] NSWADT 123
•22 June 2012
Administrative Decisions Tribunal
New South Wales
- Amendment notes
Medium Neutral Citation: Bristrol Custodians Ltd v Chief Commissioner of State Revenue [2012] NSWADT 123 Hearing dates: 30 May 2012, 5 June 2012 Decision date: 22 June 2012 Before: Judge K P O'Connor, President Decision: The review applicant's application under s 58(4) of the Administrative Decisions Tribunal Act 1997 for a notice to produce further documents that may be relevant to the determination is refused.
Catchwords: STATE REVENUE - Interlocutory application by review applicant for further documents - Administrator's obligation to produce all documents relevant to the determination of the review application - Scope - Application Refused - Administrative Decisions Tribunal Act 1997 Legislation Cited: Administrative Decisions Tribunal Act 1997
Duties Act 1997
Taxation Administration Act 1996Cases Cited: AAT Case 10, 122 (unreported, 11 April 1995)
Bausch v Transport Accident Commission (unreported, 3 December 1996)
Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184
KLGL and QCYY and Australian Prudential Regulation Authority [2008] AATA 452
Pacific General Securities Ltd & Anor v Chief Commissioner of State Revenue [2003] NSWADT 183
Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Department of Industry, Tourism and Resources (2005) 83 ALD 104
Re Thomas Cook Australia Pty Ltd and Collector of Customs (1994) 34 ALD 301
Schiffer v Pattison [2001] FCA 1094
Transport Accident Commission v Bausch [1998] 4 VR 249Category: Interlocutory applications Parties: Bristrol Custodians Ltd (Applicant)
Chief Commissioner of State Revenue (Respondent)Representation: Counsel
I Young (Applicant)
A Rider (Respondent)
Leonard Legal (Applicant)
Crown Solicitor's Office (Respondent)
File Number(s): 116094 Publication restriction: Order under s 75(2) of the Administrative Decisions Tribunal Act 1997: that paragraphs [57-59] and [68-73] of these reasons only be disclosed to the respondent and the respondent's legal representatives; and otherwise not disclosed or published to the applicant or any other person, without the consent of the respondent.
REASONS FOR DECISION
This decision deals with a preliminary application by the applicant for review seeking production under s 58 of the Administrative Decisions Tribunal Act 1997 (ADT Act) of further documents from the agency respondent to a review application.
Background Circumstances
In August 2006, the LSW Group Pty Ltd (sole director and shareholder, Mr Geoffrey Ronald Buckfield) purported to transfer for nil consideration industrial land at Yennora and Bankstown to the review applicant, Bristrol Custodians Ltd (sole director and shareholder, Mr Buckfield), referred to henceforth as 'the taxpayer'. Based on information supplied by the parties at the time, the Chief Commissioner accepted that the transfer was dutiable at the nominal rate rather than the ad valorem rate, treating the transfer as one made between the previous trustee and the new trustee of a trust known as the LSW Group Property Trust.
The relevant provision is s 54(3) of the Duties Act 1997 (Duties Act):
(3) Duty of $10 is chargeable in respect of a transfer of dutiable property to a person other than a special trustee as a consequence of the retirement of a trustee or the appointment of a new trustee, if the Chief Commissioner is satisfied that, as the case may be:
(a) none of the continuing trustees remaining after the retirement of a trustee is or can become a beneficiary under the trust, and
(b) none of the trustees of the trust after the appointment of a new trustee is or can become a beneficiary under the trust, and
(c) the transfer is not part of a scheme for conferring an interest, in relation to the trust property, on a new trustee or any other person, whether as a beneficiary or otherwise, to the detriment of the beneficial interest or potential beneficial interest of any person.
If the Chief Commissioner is not so satisfied, the transfer is chargeable with the same duty as a transfer to a beneficiary under and in conformity with the trusts subject to which the property is held, unless subsection (3A) applies.
In March 2007 the LSW Group Pty Ltd went into liquidation. (This company is now known as ACN 092 138 442.) Based, at least in part, on advice given to the Office of State Revenue (OSR) by the liquidators, Cor Cordis, the Chief Commissioner moved to reassess the transaction. The partner responsible for the liquidation is Mr Mark Hutchins. The liquidators are pursuing Supreme Court proceedings to which the taxpayer is the respondent.
The Chief Commissioner issued to the taxpayer a notice of reassessment on 23 March 2011 requiring payment of duty at the ordinary rate, and imposed penalty and interest, the total amount being $280,307.81. In that notice the Chief Commissioner asserted that the LSW Group Pty Ltd did not acquire the subject properties as trustee of any trust and that the transfer to the taxpayer was not as a consequence of the appointment of a new trustee.
The taxpayer objected. The Chief Commissioner determined to disallow the objection by notice issued 21 November 2011. It was accompanied by reasons for the determination. The reasons gave grounds for disallowance going beyond those relied on in the original determination. They included lack of satisfaction that there was an operative trust deed; and that the transfer had not been for nominal consideration. The taxpayer applied for review on 2 December 2011 pursuant to s 96 of the Taxation Administration Act 1996 (TA Act).
Duty to lodge material documents
The Chief Commissioner is obliged by s 58(1) of the ADT Act, as qualified by s 96(5) of the TA Act, to furnish the Tribunal with documents relevant to the determination of the application for review.
Section 58(1) provides:
58 Duty of administrator to lodge material documents with Tribunal where decision reviewed
(1) An administrator whose reviewable decision is the subject of an application for review to the Tribunal must, within 28 days after receiving notice of the application, lodge with the Tribunal:
(a) a copy of any statement of reasons given to the applicant under section 49 (or, if no such statement was given to the applicant, a statement of reasons setting out the matters referred to in section 49 (3)), and
(a1) a copy of any statement of reasons for a decision in an internal review conducted in respect of the reviewable decision, and
(b) a copy of every document or part of a document that is in the possession, or under the control, of the administrator that the administrator considers to be relevant to the determination of the application by the Tribunal.
Section 96(5) of the TA Act qualifies s 58 of the ADT Act in this way:
(5) For the purposes of section 58 (1) (a) of the Administrative Decisions Tribunal Act 1997:
(a) the obligation of the Chief Commissioner under that paragraph to lodge a statement of reasons with the Tribunal in respect of an application is limited to providing the Tribunal with a statement of reasons only in respect of the matters arising from the grounds specified in the application, and
(b) if one of the grounds specified in the application relates to a matter raised in an objection determined by the Chief Commissioner-the Chief Commissioner may rely on reasons previously given to the taxpayer by the Chief Commissioner under section 93 for the determination of the objection in explanation of that part of the assessment or decision to which the objection related.
Note. Section 58 of the Administrative Decisions Tribunal Act 1997 requires an administrator whose reviewable decision is the subject of an application for review to the Tribunal to lodge with the Tribunal certain relevant documents relating to the decision, including statements of reasons.
(I observe that the Note does not properly reflect the terms of s 58, which speaks of documents that the administrator considers to be 'relevant' not 'certain relevant' documents.)
Section 96(5)(b) refers to s 93 of the TA Act. It is a precondition to the lodgment of an application for review of a decision under the TA Act that the taxpayer first lodge an objection to the assessment with the Chief Commissioner. Section 93 provides:
93 Notice of determination
(1) The Chief Commissioner must give notice to the objector of the determination of the objection.
(2) The Chief Commissioner must, in the notice, give the reasons for disallowing an objection or for allowing an objection in part only.
(2A) The reasons for a determination of an objection in respect of an assessment or other decision that the Administrative Decisions Tribunal has jurisdiction under Division 2 to review must set out the matters referred to in section 49 (3) of the Administrative Decisions Tribunal Act 1997 in respect of the determination.
(2B) The notice must also inform the objector of the objector's right to make an application for review under Division 2 in the case of a determination to disallow the objection or to allow the objection in part only.
(3) The notice is to be in a form approved by the Chief Commissioner.
Section 49(3) of the ADT Act, to which s 93(2A) refers, provides:
(3) The statement of reasons is to set out the following:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,
(b) the administrator's understanding of the applicable law,
(c) the reasoning processes that led the administrator to the conclusions the administrator made.
The other provisions of the part of the ADT Act in which s 49(3) appears relating to the giving of reasons for decision do not apply to the Chief Commissioner: see s 96(4), TA Act.
These provisions have as part of their wider context the Tribunal's obligation under s 63(1) of the ADT Act as amplified by s 101 of the TA Act:
ADT Act
63 Determination of review by Tribunal
(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:
(a) any relevant factual material,
(b) any applicable written or unwritten law.
(2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision.
(3) In determining an application for the review of a reviewable decision, the Tribunal may decide:
(a) to affirm the reviewable decision, or
(b) to vary the reviewable decision, or
(c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or
(d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.
TA Act
101 Powers of court or tribunal on review
(1) The court or tribunal dealing with the application for review may do any one or more of the following:
(a) confirm or revoke the assessment or other decision to which the application relates,
(b) make an assessment or other decision in place of the assessment or other decision to which the application relates,
(c) make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid,
(d) remit the matter to the Chief Commissioner for determination in accordance with its finding or decision,
(e) make any further order as to costs or otherwise as it thinks fit.
(2) Nothing in this section limits the application of the following provisions of the Administrative Decisions Tribunal Act 1997 in respect of an application for review before the Administrative Decisions Tribunal:
(a) Division 3 of Part 3 of Chapter 5, [which includes s 63]
(b) section 88.
If an administrator does not wish to produce relevant documents, the following provisions of the ADT Act apply:
Section 58(7)
(7) Nothing in this section requires the disclosure of, or the granting of access to, any document (or a copy of a document) in contravention of any of the following:
(a) an order made under section 59 (Objections to lodgment),
(b) an order made under section 75 (Proceedings on hearing to be conducted in public),
(c) section 124 (Effect of Government Information (Public Access) Act 2009),
(d) section 125 (Privileged documents).
Section 59
(1) An administrator may apply to the Tribunal before the expiry of the period referred to in section 58 (1) for an order that the administrator not be required to lodge a copy of a document under section 58.
(2) On any such application, the Tribunal may make an order that a copy of a document not be lodged with the Tribunal if:
(a) it is satisfied that section 125 operates so as not to require the disclosure of the document, or
(b) it considers that, if an application were made under section 75 (2), it would be appropriate to make an order under that subsection prohibiting or restricting the publication or disclosure of evidence of the document.
Lodgment in this Case
The Chief Commissioner furnished the Tribunal and the taxpayer with two bundles of documents, a main bundle (index plus folios 1-195) and a supplementary bundle (index folio 1-138).
In addition, in response to concerns raised by the taxpayer at a directions hearing on 18 January 2012 about the adequacy of this material, the Chief Commissioner has filed an affidavit sworn 9 February 2012 from an officer, Mr Malcolm Druery, dealing with two matters: the extent of its searches for relevant material; and the reasons for redacting a passage from an internal memorandum of advice. This document was variously described in the proceedings as the 'confidentiality statement'. It is so described in Mr Druery's affidavit, and appears to be the description used in the Office of State Revenue. However, I will use the term 'objection report' in these reasons, as I think it better reflects its function.
There are separate proceedings in the Supreme Court initiated by the liquidators against the taxpayer and Mr Buckfield. There has been liaison between officers of the Office of State Revenue and Mr Hutchins, of the liquidator, in relation to revenue issues seen as possibly arising out of those proceedings. This litigation is seen by the Chief Commissioner as influencing the making of the preliminary application.
The Preliminary Application
The preliminary application, as finally formulated, was made under 's 58(4) of the ADT Act and/or s 49(3) of the ADT Act'.
Section 58(4) of the ADT Act provides:
(4) If the Tribunal or President considers that other particular documents (or that other documents included in a particular class of documents) may be relevant to the determination of the application, it may cause a notice in writing to be served on the administrator:
(a) stating that the Tribunal or President is of that opinion, and
(b) directing the administrator concerned to lodge with the Tribunal, before a date specified in the notice, a copy of each of those other documents that is in the possession, or under the control, of the administrator.
Section 49(3), set out above, does not, in my opinion, give an independent right to make an application. I will proceed on the basis that the foundation for the application is s 58(4).
The application is for the Tribunal to direct the Commissioner to produce:
(a) The index to the compliance file as particularised at paragraph 5(c) of the affidavit of Malcolm Druery dated 9 February 2012;
(b) The redacted section of the Confidentiality Statement dated 21 November 2011 at folios 130-131 of the Supplementary Documents;
(c) The letter dated 21 November 2011 by Mr Druery to Mr Mark Hutchins of Cor Cordis, Chartered Accountants;
(d) The complete 'Review File' referred to in paragraph 11 of the affidavit of Malcolm Druery ...
(e) In so far as not already included in the Review File any file note of the meeting or contact between Mr Druery and Mr Hutchins;
(f) [not pressed].
The parts of Mr Druery's affidavit referred to above read as follows:
'5. I have caused inquiries to be made with Ms Sue Shepherd, the Compliance Investigator with the OSR's Compliance Branch, who handled the Reassessment, about the manner in which the Compliance Branch's file was prepared for transfer to the Review Branch. From my discussion with Ms Shepherd, and from my experience of handling objections on behalf of the Review Branch it is my understanding that the following steps were taken: ...
(c) The documents were arranged and indexed in folio numbers.'
'11. The file I maintained therefore contained the following documents:
a. The Compliance File;
b. Additional material obtained through my own researches;
c. The Confidentiality Statement;
d. The Objection Decision;
e. Correspondence.
In this affidavit, I refer to the material collectively as the 'Review File'. As outlined above, I retained written material generated or obtained in relation to the Objection on the Review File.'
The Chief Commissioner's case is the application has no foundation, and is resisted primarily on the basis that the material sought is not relevant, and also on the basis that the taxpayer is undertaking a fishing expedition for material that might assist its case in the Supreme Court proceedings.
The Submissions
The Tribunal has before it (as a confidential exhibit) the redacted text and a folder (confidential exhibit R1). It has heard submissions from the administrator in confidential session. Mr Druery has attended the proceedings. He has been cross-examined in public session by the applicant. The applicant has referred to case-law in relation to the obligation to produce relevant documents.
The taxpayer's submission is that s 58 of the ADT Act encourages wide disclosure of relevant documents and is not hedged about with restrictions. It is a discovery procedure, and seeks to avoid the need for the Tribunal to become involved with processes of that kind, or the regular use of summonses for documents. The taxpayer referred to the leading case in this Tribunal on the nature of s 58 obligation, Pacific General Securities Ltd & Anor v Chief Commissioner of State Revenue [2003] NSWADT 183 (Verick JM), and case-law in the Commonwealth and Victorian merits review jurisdictions where similar provisions are found.
In reply the Chief Commissioner questioned the continued authority of Pacific General. In that decision the Tribunal undertook a comprehensive examination of the then relevant case-law, after expressing concern over the narrowness of the material produced by the Chief Commissioner. It directed that the objection report (or 'confidentiality statement') should be produced, calling it in its decision the 'first objection report'.
The Chief Commissioner noted that the Tribunal had been in error in describing the decision under review as the objection determination. In Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 Basten JA noted at [28] that the provision governing the Supreme Court's review jurisdiction (which in this respect is in the same terms as the ADT's provision) makes the original decision the decision under review, not the objection decision.
In this instance the original decision only cited two grounds of concern. But the objection determination widened the compass considerably. It contained, at the least, ten grounds of concern. The scheme of this legislation is such that the taxpayer is obliged to lodge an objection to the original decision in order to have standing to proceed. Further, the requirement to furnish reasons for decision only applies to the Chief Commissioner at this second stage. The review application, in the normal course, will have been preceded by two determinations, the original one and the determination disallowing in whole or in part the objection. In my view the material that has come into existence subsequent to the original decision and which bears on the original decision should, on any reasonable view, be regarded as material to which s 58 refers.
There is nothing to prevent an administrator on reconsideration from widening the grounds for an adverse decision, and that has occurred in this case. The taxpayer is proceeding on the basis that the grounds relied upon in both the original decision and the objection decision need to be met. This, in my view, is reasonable until disabused of that understanding in an appropriately formal way by the Chief Commissioner.
The second submission for the Chief Commissioner was that the opinion of the Commissioner as to what may be relevant is to be approached in an objective way. I agree. The submission then went on to assert that there is no fixed rule that every objection report should therefore be included in the s 58 documents. I do not understand Pacific General to be laying down a fixed rule in substitution for the statutory criterion.
The Chief Commissioner also noted that the onus of proof rested on the taxpayer, both at the objection stage and before the Tribunal: TA Act, s 88; s 100(3); and that this application was causing further delay in disposing of the matter. The Chief Commissioner submitted that the question was not merely one of 'relevance' but one of 'relevance to the determination'. Relevance was to be assessed by reference to the elements of which the Chief Commissioner required satisfaction. They were set out in s 54(3) of the Duties Act. They were to be distinguished from what might be relevant to the Supreme Court proceedings.
Mr Druery was called to give evidence in relation to the existence or otherwise of notes of his meetings with Mr Hutchins on 4 October 2011 and around 10 November 2011. In relation to the 4 October 2011 meeting his evidence was that he kept no notes of the meeting, but incorporated the substance of it into the objection report. In the case of the 10 November 2011 meeting he took a separate file note. Mr Young for the applicant formally called for the file note of the 10 November 2011 meeting.
The Tribunal held a closed session, in which the Chief Commissioner made submissions as to the contents of confidential folder R1.
Consideration
The duty imposed by s 58 as qualified by s 93 of the TA Act is a duty to provide documents as distinct from information. The duty has two components: (1) provision of a statement of reasons, as informed in this case by the modification in s 93 of the TA Act; and (2) provision of a copy of every document that 'the administrator considers to be relevant to the determination of the application by the Tribunal'.
This duty is at the heart of the effective operation of the Tribunal's external merits review jurisdiction. While the Tribunal, in the usual metaphor, 'stands in the shoes' of the administrator, it does so without the advantages of the administrator. This Tribunal is not set up as an investigative body, and rarely informs itself by the use of own motion coercive powers. It relies on the administrator to place before the Tribunal the relevant material. The discretion is given to the administrator. The Tribunal's ability to make the correct and preferable decision in all the circumstances (ADT Act, s 63) depends upon the administrator undertaking its duty conscientiously and lawfully. See generally, Schiffer v Pattison [2001] FCA 1094 at [52] per Kenny J.
In the Revenue Division of the Tribunal the nature of the duty has only received close consideration in Pacific General. The decision refers to the leading authorities on the broadly equivalent provision governing the procedures of the Commonwealth merits review tribunal and the Victorian merits review tribunal, cases such as Schiffer v Pattison; Bausch v Transport Accident Commission, Supreme Court of Victoria (Eames J), unreported, 3 December 1996; and Transport Accident Commission v Bausch [1998] 4 VR 249 (CA, Tadgell, Batt and Buchanan JJ). The applicant also drew attention to a decision in the taxation appeals jurisdiction of the Commonwealth merits review tribunal made by Mathews J, President, AAT Case 10,122 decided 11 April 1995.
In the latter case, Mathews J addressed a taxpayer's concern that the Federal Commissioner of Taxation might confront the taxpayer with information at hearing without prior notice, perhaps during cross-examination. Her Honour referred to the important role played by the disclosure provision in the operation of the Commonwealth Administrative Appeals Tribunal, and the undesirability of allowing exceptions from the duty of disclosure that might facilitate 'ambush' tactics by a party. She noted then, over fifteen years ago, that '[T]he principle of trial by ambush is in retreat even in the court system' (at [22]). She emphasised the importance of the principle of full disclosure of all relevant material, and its connection to the basic duty to afford a party procedural fairness.
Verick JM's decision in Pacific General Securities led to a significant change in the s 58 disclosure practices of the Chief Commissioner. It led to the routine production of the objection report. Mr Rider, for the Chief Commissioner, in his submissions in effect questioned the practice. As noted above, it has led to the production of the internal advice given to the delegate of the decision maker prior to issuance of the formal reasons for decision (here the reasons to which s 93 of the TA Act refers). In my view his reasoning would have been the same after Paspaley.
On the other hand, the Chief Commissioner agreed that the test as to what is relevant is to be applied in an objective rather than a subjective way, accepting the approach in the Victorian case, Transport Accident Commission v Bausch.
The administrator's obligation is to furnish the Tribunal with all material considered 'relevant to the determination' of the application by the Tribunal. It is not an easy task for the Tribunal to form any view separate from the administrator's as to what might properly be seen as relevant at an early stage of a review application. At final hearing, it may be relatively easy to determine relevance as the facts in dispute may have become clearer and the legal issues more clearly identified. The section 58 lodgment occurs at a much earlier stage of the process. The difference in revenue cases is that there will be a detailed objection decision as a reference point. It is important that the administrator take a generous approach to the s 58 requirement, so as to ensure that the Tribunal has a complete picture; and the review applicant is not disadvantaged by having concealed any material known to the administrator that may assist their case.
On the other hand, there is nothing to be gained in the process being flooded by documents where, at best, any relevance may be highly speculative or plainly non-existent. Similarly, the facility to apply to the Tribunal under s 58(4) should not be allowed to become the basis for a fishing expedition or an oppressive application.
The yardstick of relevance under s 58 in my view is whether the documents are 'likely to inform the review process' (KLGL and QCYY and Australian Prudential Regulation Authority [2008] AATA 452 (Taylor SC, Snr Member) at [16]. I also agree that 'the notion of relevance carries with it a purposive connotation dealing with the capacity of the document to influence the determination of the proceedings': at [17]. To similar effect see Re Thomas Cook Australia Pty Ltd and Collector of Customs (1994) 34 ALD 301 at 304.
It will be seen that the approach I have adopted does not go so far as to treat 'relevant' for the purpose of s 58 as extending so wide as to capture material that, applying the literal meaning of the term, can be said to be 'bearing on, connected with, or pertinent to the matter in hand'. In that regard I prefer the view adopted by the member in KLGL to that expressed by Forgie DP in Re Spicer Axle Structural Components Australia Pty Ltd and Secretary, Department of Industry, Tourism and Resources (2005) 83 ALD 104.
The Present Case
In this case the taxpayer first received a statement of reasons as an attachment to the objection determination. They comprise five, closely typed A4 pages, perhaps 3000 words in length. They clearly derive from the objection report which is 17 closely typed pages long (but for the redacted section already mentioned of about one page's length).
In his submissions, counsel for the taxpayer, Mr Young, has drawn attention to the statement of reasons obligation, in particular these requirements:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,
(b) the administrator's understanding of the applicable law,
(c) the reasoning processes that led the administrator to the conclusions the administrator made.
In my view the two documents mentioned clearly satisfy requirements (b) and (c). The position in relation to (a) is somewhat less clear, and it would have been simpler to address had the documents separately set out material questions of fact and any findings, with references to the evidence or other material on which they were based. However, I am satisfied that, fairly viewed, the factual assertions of the Chief Commissioner are clear, and his office's reasons for no longer accepting the validity of the 2006 assessment are carefully explained.
In my view, the position in relation to compliance with requirement (a) is complicated in regulatory settings of the present type. The taxpayer has sought a concession. The onus is on the taxpayer to make the case for the concession. Here the taxpayer succeeded initially. However, the Chief Commissioner is free to reopen an assessment for up to five years, and require the taxpayer to remake their case. In remaking his decision in this case, the Chief Commissioner has plainly relied on input from the liquidators in relation to what they regard as the true state of affairs as to the creation of the trust, and the nature of the transfer; and has been satisfied as to those matters.
The OSR is a law enforcement agency, and in that capacity has an investigative wing. As I understand the evidence, when the matter moves into the determination phase, here reassessment, a review file is created. The review file might then include the compliance file.
The basic concerns of the Chief Commissioner have been well exposed via the formal reasons for decision in support of the objection determination, and in the objection report.
In his submissions Mr Young referred with particular concern to the following statement that appears at page 2 of the reasons for the objection determination (main bundle, folio 191):
'First, we have information that the Deed of Settlement of 30 October 2000 (which you claim established the LSW Group Property Trust) is a pro forma document which was not developed until many years later.'
This is the first of ten grounds given as to why the transfer did not fall within the exception allowed by s 54(3) of the Duties Act.
The Chief Commissioner, relying on oral evidence given by Mr Druery in relation to which he was cross-examined, responded that the 'information' referred to at folio 191 was entirely non-documentary. On balance, I accept Mr Druery's evidence. In my view any documentary information that is in existence going to this matter would be relevant. I would be concerned if at hearing the Chief Commissioner were to introduce documentary material that relied on the 'information'. This would involve the abuse to which Mathews J referred in AAT Case 10,122.
I accept, on the other hand, that the reassessment in effect calls on the taxpayer to show that the original assessment of August 2006 was well founded. The taxpayer is in the best position to produce critical evidence going to the origins of the trust deed, the circumstances of its creation, the nature and status of the trustee, issues in relation to succession of trustees; and other matters of contention such as the alleged transfer at value and the like.
As I understand it, the taxpayer has joined issue on these fundamental matters, and if that case is lost, ancillary matters are in dispute such as the assessable valuation and the imposition of penalty and interest.
In approaching the issue of relevance in this case, influenced by the approach found in the AAT authorities that I prefer, I have not treated as relevant - documents in the nature of internal communications between officers reporting progress or requesting advice. I have taken a similar view in relation to records of communications between compliance officers and external sources such as the liquidators.
I am mindful that the Chief Commissioner has put a submission to the effect that the original decision supplies only two grounds for the reassessment. But that decision has no statement of reasons attached to it, and it would be perverse were I, at this stage of the proceedings, to treat the decision as informative on the relevance issue. Indeed, the Chief Commissioner's s 58 filing does not, in any event in my view, reflect that perspective. It is reflective of the wider approach taken in the objection report and the objection determination.
Item (a) The index to the compliance file
[Not for publication]
[Not for publication]
[Not for publication]
Item (b) The redacted section of the objection report
The Commissioner's position is that the redacted statement is not relevant.
The objection report (Tab 6, supplementary bundle 115-131) had, as previously noted, one page redacted.
Below the heading at p 130, Recommendation on the Objection, the text finishes 'For these reasons, the objection to the reassessment of duty on the August 2006 Transfer should be wholly disallowed.'
Then follows a blacked out remainder of the page (about three quarters of the whole page) and a further block at the top of p 131 (a little less than a quarter page), against which appears the words 'Redacted for irrelevance'. Given the closely typed format of the remainder of the document, it could reasonably be assumed that around 800-1000 words have been suppressed.
As to this matter, Mr Druery deposed at paras 18-20:
'18. In general terms, the redacted material included:
a. My consideration of whether the facts as ascertained by myself during the objection process potentially gave rise to any further revenue consequences;
b. My suggestions regarding further steps to be taken to ascertain whether these revenue consequences in fact arose.
19. I included the redacted material in the Confidentiality Statement to draw attention of other officers of the OSR to further matters arising from the information I had considered which might have consequences for the Respondent's administration of revenue matters. The inclusion of this material provided a written record of these recommendations.
20. The redacted material did not include:
a. Any factual material that was relevant to the Reassessment;
b. Any consideration of whether the material before me was relevant to the Reassessment.'
I heard submissions in closed session on the relevance or otherwise of the redacted material. I have perused the redacted material, submitted in an envelope as a confidential exhibit. I accept the evidence of Mr Druery and am satisfied that it is not relevant to the present dispute.
Item (c) The letter dated 21 November 2011 by Mr Druery to Mr Mark Hutchins of Cor Cordis
Mr Rider stated that the taxpayer already has this letter via folio 118 of the supplementary bundle. I am satisfied that is the case. Accordingly, in my view there is no basis for this application.
Item (d) The complete Review File
The Commissioner's position is that all relevant documents have been provided.
[Not for publication]
[Not for publication]
[Not for publication]
[Not for publication]
[Not for publication]
Item (e) In so far as not already included in the Review File any file note of the meeting or contact between Mr Druery and Mr Hutchins
[Not for publication]
Disposition of the Matter
The reasons at [57-59] and [68-73] are suppressed in the public version of these reasons, as they refer to the contents of the confidential exhibit, and submissions made in confidential session. It is open to the Chief Commissioner to release them if he so decides.
Order
The review applicant's application under s 58(4) of the Administrative Decisions Tribunal Act 1997 for a notice to produce further documents that may be relevant to the determination is refused.
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Amendments
28 June 2012 - Second line should read 'concession' not 'setting'
Amended paragraphs: 47
Decision last updated: 28 June 2012
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