FEDERAL COURT OF AUSTRALIA
Charara v Commissioner of Taxation [2016] FCA 451
File number: NSD 429 of 2015 Judge: WIGNEY J Date of judgment: 29 April 2016 Catchwords: ADMINISTRATIVE LAW – appeal against dismissal of application by Administrative Appeals Tribunal under
s 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth) – self-represented litigant – where applicant made recusal application against Tribunal member on grounds of apprehended bias – where recusal application was rejected – where the Administrative Appeals Tribunal assured the applicant that they would not dismiss the matter – where the applicant was conveyed to hospital – where Administrative Appeals Tribunal dismissed the matter in the applicant’s absence – whether the Administrative Appeals Tribunal made an error of law by misapplying
s 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth) and denied the applicant procedural fairness – whether the Tribunal member’s reasons demonstrate apprehended bias on the basis of predisposition or prejudgmentLegislation: A New Tax System (Goods and Services Tax) Act 1999 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth), Div 5, ss 2A, 2A(b), 33(1), 33(1)(b), 33(2), 33(2A), 42A, 42A(5), 42A(5)(b), 44
Taxation Administration Act 1953 (Cth), s 14ZZK(b)
Cases cited: Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts [2011] FCAFC 59
Berry v Commissioner of Taxation [2015] FCA 1244
British American Tobacco Services v Laurie (2011) 242 CLR 283 at 306[47] (French CJ)
Dye v Commonwealth Securities Ltd (No 4) [2010] FCA 910
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Galea v Galea (1990) 19 NSWLR 263
Guse v Comcare (1997) 49 ALD 288
Johnson v Johnson (2000) 201 CLR 488
Jones v Australian Competition and Consumer Commission (2002) 76 ALD 424
LVR (WA) Pty Ltd v Administrative Appeals Tribunal and Another (2012) 203 FCR 166
Minister for Immigration and Border Protection v Eden [2016] FCAFC 28.
Minister for Immigration and Border Protection v Singh (2014) 231 FCR 437
Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332
Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507
Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507
NADH of 2001 v Minister for Immigration and Indigenous Affairs [2004] FCAFC 328
NAOX v Minister for Immigration and Citizenship (2009) 112 ALD 54
Penhall-Jones v State of NSW [2007] FCA 925
R v Commonwealth Conciliation and Arbitration Commission; Ex parte The Angliss Group (1969) 122 CLR 546
R v Esposito (1998) 45 NSWLR 442
R v Minister for Immigration and Multicultural Affairs; Ex parte AB (2000) 177 ALR 225
Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352
Re Refugee Review Tribunal; Ex parte H and Another [2001] HCA 28
SZKLK v Minister for Immigration and Citizenship [2008] FCA 1125
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- AGLC
- Charara v Commissioner of Taxation [2016] FCA 451
- Case
- [2016] FCA 451
- Decision Date
CaseChat Overview and Summary
Mr Charara brought an appeal against the dismissal of his application for review by the Administrative Appeals Tribunal (AAT). The central issue was whether the AAT erred in dismissing Mr Charara's application and whether he was denied procedural fairness due to apprehended bias by the Tribunal member. The AAT had dismissed the application after Mr Charara was hospitalised during the hearing, and he had been absent when the dismissal occurred. The appeal was grounded on two legal questions: whether the AAT misapplied section 42A(5) of the Administrative Appeals Tribunal Act 1975 (Cth) and whether Mr Charara was denied procedural fairness.
The court examined the basis of Mr Charara's recusal application, which included claims that the Tribunal member exhibited bias through statements such as telling Mr Charara that he did not believe him and referring to his evidence as "nonsense." Despite the Tribunal member's denial, the court found that the evidence of Mr Charara and his associate supported the claim that the Tribunal member did indeed make such statements. The court also considered the overall conduct of the Tribunal member, which Mr Charara perceived as biased and unfair. The court concluded that the Tribunal member's refusal to recuse himself and the subsequent dismissal of the application in Mr Charara's absence amounted to a significant procedural error. The court found that the AAT had misapplied section 42A(5) and denied Mr Charara procedural fairness by not adequately addressing his concerns about bias and by dismissing the application without his presence.
The court allowed the appeal and set aside the AAT's decision. It remitted the matter to the AAT to be reheard by a differently constituted Tribunal. The court did not order costs for either party, reflecting the complexity and significance of the procedural issues involved. The decision underscored the importance of procedural fairness and the need for tribunals to carefully handle recusal applications and ensure that all parties are present when significant decisions are made.
The court examined the basis of Mr Charara's recusal application, which included claims that the Tribunal member exhibited bias through statements such as telling Mr Charara that he did not believe him and referring to his evidence as "nonsense." Despite the Tribunal member's denial, the court found that the evidence of Mr Charara and his associate supported the claim that the Tribunal member did indeed make such statements. The court also considered the overall conduct of the Tribunal member, which Mr Charara perceived as biased and unfair. The court concluded that the Tribunal member's refusal to recuse himself and the subsequent dismissal of the application in Mr Charara's absence amounted to a significant procedural error. The court found that the AAT had misapplied section 42A(5) and denied Mr Charara procedural fairness by not adequately addressing his concerns about bias and by dismissing the application without his presence.
The court allowed the appeal and set aside the AAT's decision. It remitted the matter to the AAT to be reheard by a differently constituted Tribunal. The court did not order costs for either party, reflecting the complexity and significance of the procedural issues involved. The decision underscored the importance of procedural fairness and the need for tribunals to carefully handle recusal applications and ensure that all parties are present when significant decisions are made.
Orders
Orders of the court
1. The appeal be allowed.
2. The decision of the Administrative Appeals Tribunal made on 9 April 2015 dismissing the applicant’s review application be set aside.
3. The applicant’s review application be remitted to the Administrative Appeals Tribunal, differently constituted, to be reheard and decided again.
4. There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Mr Charara appealed the Tribunal’s decision to dismiss his claim pursuant to s 45A(2) of the AAT Act. The appeal was brought pursuant to s 44 of the AAT Act. The appeal raises two questions of law: first, whether in dismissing Mr Charara’s application the Tribunal misconstrued or misapplied s 42A(5) of the AAT Act; and second, whether Mr Charara was denied procedural fairness on the ground of apprehended bias.BACKGROUND It is unnecessary to delve in any great detail into the intricacies of Mr Charara’s review application in the Tribunal. That is fortunate, because the parties did not provide much assistance to the Court in that regard. Ultimately, at the Court’s request, the Commissioner tendered the objection decision that was the subject of the review application, together with the respective Statements of Facts, Issues and Contentions that had been filed in the Tribunal by Mr Charara and the Commissioner. Following is a brief summary of the background facts and circumstances so far as they are able to be gleaned from those documents. It must be said, however, that those documents are far from pellucid or helpful. Mr Charara conducted, or was associated in some way with, a number of businesses. One of those businesses involved the sale of printer cartridges and stationery. The other involved the provision of services including debt collection, repossession and the service of documents. Mr Charara’s business was registered under the A New Tax System (Goods and Services Tax) Act 1999 (Cth). He used the business name Austpower Commercial Services. Mr Charara was also, at various times, a director of a number of companies, including Austpower Commercial and Technology Supplies Pty Ltd, Media Press Computer Supplies Pty Ltd and Mediapress Computer Supplier Pty Ltd. Mr Charara relevantly lodged GST returns under the GST Act in respect of the period from 1 December 2009 to 31 December 2011. He relevantly lodged income tax returns for the income years ended 30 June 2008, 2009, 2010 and 2011. On 4 May 2012, the Commissioner commenced an audit into Mr Charara’s income tax and GST affairs. That audit was finalised in late April 2013. It resulted in the issue of GST assessments in respect of amounts payable under the GST Act for the overall period October 2009 to December 2011, and amended income tax assessments in respect of income tax for the years ended 30 June 2008, 2009, 2010 and 2011. The main basis for the GST assessments and amended income tax assessments would appear to be that Mr Charara was the sole signatory and authorised operator of a number of bank and debit card accounts during the period 2008 and 2011. The Commissioner’s audit identified a number of deposit and credit transactions in those bank accounts. The Commissioner inferred that those transactions related to taxable supplies and represented the proceeds of Mr Charara’s business operations. It would appear that Mr Charara claimed that the deposits did not, or did not entirely, relate to taxable supplies or receipts from his business operations. He provided explanations for the transactions in his bank accounts that were supposedly consistent with that claim. The Commissioner did not accept Mr Charara’s explanations. The assessments and amended assessments were issued on that basis.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
The questioning of Mr Charara continued in much the same way for the balance of the day. On the following morning, the third day of the hearing, Mr Charara applied for the Tribunal member to recuse himself on the grounds of apprehended bias. THE RECUSAL APPLICATION AND DECISION Mr Charara’s application that the Tribunal member recuse himself was based on seven complaints or contentions. Each of the complaints related ultimately to the claim that the Tribunal member was predisposed in favour of the Commissioner. First, Mr Charara claimed that the Tribunal member had twice told Mr Charara that he did not believe him. Second, Mr Charara relied on the exchange, referred to earlier, during which the Tribunal member referred to Mr Charara’s evidence about a particular invoice as being “nonsense”. Third, Mr Charara complained that the Tribunal had conducted the cross-examination on behalf of the Commissioner. Fourth, Mr Charara claimed that the Tribunal had instigated particular lines of questioning in favour of the Commissioner. Fifth, Mr Charara contended that the Tribunal had continuously assisted the Commissioner’s position. Sixth, Mr Charara alleged that the Tribunal had failed to respond to his complaint, at the beginning of the second day, that the Tribunal member’s conduct of the hearing was intimidating him. And seventh, Mr Charara complained generally that the Tribunal’s approach to the hearing was not fair or impartial. The Tribunal member refused to recuse himself. He rejected each of Mr Charara’s contentions or complaints. In relation to first contention, there was some confusion or uncertainty concerning Mr Charara’s claim that the Tribunal member had told Mr Charara that he did not believe him. The transcript, which was not available at the time, does not record any such exchange. Nor do the hearing tapes record any such statement. Nevertheless, at the time of the recusal application, counsel for the Commissioner advised the Tribunal member that he recalled one occasion when the Tribunal member said that he did not believe Mr Charara. That was in the context of the questions concerning the invoice on the letterhead of Mediapress Computer Supplies Pty Ltd. That was the same series of questions during which the transcript records the Tribunal referring to Mr Charara’s evidence as “just nonsense”. Mr Charara’s evidence in this Court was that the Tribunal did say “I don’t believe you” twice during the questioning. Evidence was also led from Mr Sogutlu to the same effect. It was not directly put to either Mr Charara or Mr Sogutlu in cross-examination that their evidence in that regard was false, though they were questioned about whether they had made and retained any notes. Both maintained that they had made notes during the hearing. Neither produced copies of those notes. In all the circumstances, the evidence of Mr Charara and Mr Sogutlu that the Tribunal member said “I don’t believe you” should be accepted, despite the fact that it does not appear in the transcript or on the hearing tapes. That is so particularly given the candid concession by counsel for the Commissioner at the time of the recusal application. Important also is that the Tribunal member did not directly dispute that he had said those words, either in the course of the recusal application, or in his decision to refuse the application.
Ratio Decidendi
Legal Principle Established
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