Brown and Commissioner of Taxation

[2005] AATA 800

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 800

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No TT2005/1

TAXATION APPEALS  DIVISION		)
Re		LORRAINE BROWN

Applicant

And COMMISSIONER OF TAXATION

Respondent

DIRECTION

Tribunal Miss Mary Imlach (Senior Member)

Date26 May 2005

PlaceHobart

Decision The application for extension of time is refused.

[Sgd Mary Imlach]

Senior Member

CATCHWORDS

Practice and Procedure - application for extension of time  within which to make application for review of determination – whether extension of time should be granted – whether applicant established arguable case for extension of time – whether applicant provided adequate explanation for delay in seeking review – application for extension of time refused.

Re Grafton and Commonwealth (1988) 16 ALD 533

Re Sam Mercorella Pty Ltd and Australian Apple and Pear Corporation (1987) 12 ALD 520

REASONS FOR DIRECTION

15 June 2005 Miss Mary Imlach (Senior Member)         

1. This is an application by Lorraine Brown (the applicant) pursuant to s29(7) of the Administrative Appeals Tribunal Act 1975 to extend the time for the making by her of an application to the Tribunal for a review of a decision by the Commissioner of Taxation (“the respondent”) dated 27 August 2002.

2.      The decision made by the respondent on 27 August 2002 was that the applicant was not operating a business for the purposes of GST registration and therefore was not entitled to claim GST input credits.

3.      The respondent contended that the sequence of events set out in its notice opposing the application for extension of time dated 3 May 2005 established that the applicant had been aware of the decision since 9 October 2002 when a copy of the original decision was sent to her.    In a telephone contact with the respondent the applicant had requested a copy be sent to her at PO Box 226, Cygnet.

4.      The copy of the decision sent to the applicant on 9 October 2002 set out not only the reasons for the decision, but included Mrs Brown’s rights of review of the decision.

5.      The respondent’s opposition to the application was based on the Commissioner’s view that:

(i)        there has been no credible explanation for the delay;

(ii)the request for review and the request for extension of time have been lodged by the applicant to delay the progress of a bankruptcy notice served on the applicant on 22 March 2005;

(iii)the issue raised by the applicant has no merit; and

(iv)there is potential disadvantage to the Commissioner arising from any further delay.

6.      The respondent contended that the Tribunal has set out the general principles upon which an application for extension of time should be considered, and that the opposing grounds set out by the respondent address those general principles.

7.      The applicant who represented herself stated that at no stage had she been informed that she could appeal the decision.   She said it was only when Jane Goodfellow of the ATO sent her a copy of the original decision on 25 February 2005, was she aware she could lodge an application for review with the Administrative Appeals Tribunal.

Issue

8.      The issue before the Tribunal is whether the applicant is able to show an acceptable explanation for the delay in lodging her application for review.

Reason for Decision

9.      The prima facie rule on an application for extension of time is that the Tribunal will not entertain proceedings out of time, unless the applicant can satisfy the Tribunal that to do so is a proper exercise of the discretion vested on it to extend time.

10.     There are a number of factors for consideration by the Tribunal on such an application, and none carries more primary weight over others.   All factors are relevant to the particular case and must be weighed together in reaching a decision.

11.     These factors include:

(a)      the strength and merit of the applicant’s case;

(b)prejudice or disadvantage to the respondent or other persons affected by the decision; and

(c)length of delay.

12.     In applying these factors to the applicant’s case a significant issue in influencing the decision of the Tribunal not to grant the application has been the obvious weakness in the applicant’s case.  In Re Sam Mercorella Pty Ltd and Australian Apple and Pear Corporation (1987) 12 ALD 520 the Tribunal noted that it is not required to investigate further than to see whether the applicant’s case has an obvious weakness or is unlikely to succeed.

13.     It was obvious to the Tribunal that when questions were put to the applicant about her objection to the assessment, and what was the basis of her objection, she was unable to articulate or stipulate what those objections were.

14.     The second factor in this case is whether there is a significant issue to be determined.    As stated previously, it was difficult to determine from the case as stated by the applicant what was the basis of her objection to the assessment by the respondent and, therefore, it cannot be said that her case raises a significant issue for determination by the Tribunal.

15.     In Re Grafton and Commonwealth (1988) 16 ALD 533 the Tribunal declined to grant an extension of time to apply because it was satisfied that the applicant was fully aware of the right to seek review of the decision in question and did nothing. An applicant cannot simply rest on his or her rights and then seek the indulgence of the AAT. The Tribunal believes in this case that the applicant would have become aware of her right of appeal to this Tribunal when she received the copy of the original decision on 9 October 2002, and chose to do nothing about it at that time.

16.     The applicant’s evidence given orally at the hearing that no-one informed her about her right of appeal is inconsistent with the letter she wrote to Mr Herniman of ATO early in April 2005 in which she said “When I first heard from your department in February 2004, I was going to appeal the matter right away.”

17.     There is evidence that a writ was issued against Mrs Brown on 13 January 2004, and was served on her personally on 21 January 2004.   The applicant must have realised at this point that the matter become serious and, if not then, on 23 June 2004 when she was advised further legal action by way of a writ on a Bankruptcy Notice would be issued.

18.     The Tribunal accepts the respondent’s contention that the effect of granting an extension of time in this case will mean there is potential prejudice and disadvantage to the respondent.    The knowledge gained by the respondent in June 2004 that the applicant and her husband sold a joint property on 6 November 2003, and that the proceeds of sale which were initially banked to a joint account have been withdrawn from that account has alerted the Department to the fact that there may be a dissipation of the applicant’s assets.

19.     The Tribunal is of the opinion that the respondent contended rightly that the application for review, and the application for extension of time were lodged with the sole purpose of further delay in the bankruptcy action against the applicant.

20.     The Tribunal agrees that the granting of time for lodging an application for review would mean a consequential delay in the bankruptcy action against the applicant.    The respondent would not be in a position to proceed with a creditor’s petition based on the act of bankruptcy arising from the service of notice of 22 March 2005.

21.     The evidence of the respondent confirms that there has already been extreme delay in this matter and the respondent has shown the applicant indulgence in her sickness, but further delay and the possible dissipation of assets are major factors to be taken into account.

22.     The application for extension of time is refused.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Miss Mary Imlach (Senior Member)

Signed: K L Miller (Administrative Assistant)

Date/s of Hearing  26 May 2005
Date of Decision  26 May 2005 Written Reasons 15 June 2005
Counsel for the Applicant         Applicant appeared on her own behalf.
Solicitor for the Applicant           
Counsel for the Respondent     Mr A McCulloch
Solicitor for the Respondent     Taxation Department